Assignment 2 – Types of Strategy

Assignment 2 – Types of Strategy

Set: 15 March 2017           due: 29 March 2017

Answer all the following questions:

  1. Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with examples.
  1. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
  1. List three industries where cooperation among competitors is most likely and explain why.
  1. Identify three joint ventures that have worked especially well in the past.
  1. List four important reasons why many mergers and acquisitions fail.
  1. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
  2. When would market development generally be the preferred strategy over backward or forward integration?
  1. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.

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94 thoughts on “Assignment 2 – Types of Strategy

  1. Rasulova Dilara 20168540 MBA

    Assignment 2- Types of strategy

    1. Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with examples.
    Forward integration is applied when,
    a. Organization’s present distributors are especially expensive and unable to meet firm’s distribution needs- Canadian communication giant Rogers establishes its own TV channel which gives the opportunity of advertising and selling its digital products using electronic version of retail store.
    b. Few quality distributors are available in the industry – for example, in 2003 News Corporation purchased DirectTV (because it is a satellite TV company) and manages the process in order to share out most of movies, programs and so on.
    c. Distributors or retailer have high profit margins- in this case they can create monopoly by using forward integration however it might not give the organization an absolute power.
    d. Organization competes in an industry that is growing,
    e. Organization has enough resources and capabilities to manage distributing their own product – as an old example American Apparel controls every aspects of its products including high rent, high-profile retail stores and etc.

    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    a. Market penetration- in order to increase sales, and also get more benefit from current market. As an example Califorian Restauran in Dereboyu can increase frequency of purchase through advertising that gives consumers a reason to go there more often.
    b. Related diversification- adding new but related product or services. For example laundry in the NEU can add ironing rooms in order to increase the number of students who goes for washing and drying their clothes.
    c. Liquidation – Selling all of company’s assets, in parts, for their tangible worth. When there is a recession period in economy most of small businesses suffer from cash insufficiency and go bankruptcy because of this reason. To extract as much value as possible the owner sells all the inventory, fixtures and equipment before permanently closing the doors.
    3. List three industries where cooperation among competitors is most likely and explain why.
    a. Mobile phones and sim card,
    b. Flashlight and battery,
    c. Computer hardware and computer software .
    All of those sectors above are producing the goods which are complimentary goods in the market. When production of one of those goods happen in the market there is a need to bring out its complimentary, otherwise the good is not useful and there is no demand as a result. So cooperation is best way for those companies, while one part is updated, another part need as well. If one part is highly improved and another is not yet both side will have no any successful business in the industry.

    4. Identify three joint ventures that have worked especially well in the past.
    a. Cisco and EMC global enterprise services,
    b. Hewlett Packard and Disney
    c. Starbucks and PepsiCo (production of coffee-based drink, frappacino)

    5. List four important reasons why many mergers and acquisitions fail.
    a. Poor communication
    b. Weak leadership
    c. No common vision
    d. Lack of courage

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
    a. Related diversification- Akwan Information Technologies- search engine company based in Brazil.
    b. Unrelated diversification- Google invests in Collective Health

    7. When would market development generally be the preferred strategy over backward or forward integration?
    Company gains ownership and control over competitors and prefers market development. So the company is in that situation which
    • Competes in a growth industry
    • While increased economies of scale provide major competitive advantages
    • It has both capital and human talent needed
    • It gains a monopolistic characteristics in a particular area
    • Its competitors are faltering due to a lack of managerial expertise

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    a. Indoor.io by Apple (Dec 1, 2016)
    b. Fly Labs by Google (Nov 11, 2015)
    c. LinkedIn by Microsoft (Dec 8, 2016)
    d. Maluuba by Microsoft (Jan 13, 2017)
    Those four examples above are technology acquisitions in past 2 years. Nowadays acquisitions are part of successful growth. They are often suitable and all parties feel satisfied. It is believing that two companies together are stronger than two different companies. They come together hoping that both will earn higher market share, and smaller ones believe they will not survive alone. It helps smaller companies in terms of overcoming problems like new products/services make them less competitive, slow industry growth, technological changes that make their equipment less competitive, changes in interest rate, inflation, unemployment that affect economic growth and other barriers. From another side acquisitions are a helpful in the meaning of expanding company in bigger geographical area, and also reducing risk by diversifying customer.

    Resources:
    1. Writer, Leaf Group. “Example of a Company’s Forward Integration.” Chron.com. Chron.com, 04 Jan. 2012. Web. 25 Mar. 2017.
    2. “Market Penetration.” Market Penetration. N.p., n.d. Web. 24 Mar. 2017.
    3. “The Most Successful Joint Venture in I.T. History.” Blogs@Cisco – Cisco Blogs. N.p., n.d. Web. 23 Mar. 2017.

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  2. Murad Ahmadli
    20166021
    MBA

    Question 1_
    This strategy is causing turmoil in some industries. For example, Microsoft is opening its own retail stores, a forward integration strategy similar to rival Apple Inc., which currently has more than 200 stores around the world. Microsoft wants to learn firsthand about what consumers want and how they buy. ome Microsoft shareholders are concerned that the company’s plans to open stores will irk existing retail partners such as Best Buy.
    Automobile dealers have for many years pursued forward integration, perhaps too much. Ford has almost 4,000 dealers compared to Toyota, which has fewer than 2,000 U.S. dealers. That means the average Toyota dealer sold, for example, 1,628 vehicles in 2007 compared to 236 vehicles for Ford dealers.
    An effective means of implementing forward integration is franchising. Approximately 2,000 companies in about 50 different industries in the United States use franchising to distribute their products or services. Businesses can expand rapidly by franchising because costs and opportunities are spread among many individuals. Total sales by franchises in the United States are annually about $1 trillion.
    • When an organization’s present distributors are especially expensive, or unreliable,
    or incapable of meeting the firm’s distribution needs.
    • When the availability of quality distributors is so limited as to offer a competitive
    advantage to those firms that integrate forward.
    • When an organization has both the capital and human resources needed to manage
    the new business of distributing its own products.
    • When the advantages of stable production are particularly high; this is a consideration
    because an organization can increase the predictability of the demand for its
    output through forward integration.
    • When present distributors or retailers have high profit margins; this situation
    suggests that a company profitably could distribute its own products and price them
    more competitively by integrating forward.

    Question 2_
    • Keeping costs down: All the high-performing companies strove to keep their production budgets low and their prices competitive. However, even when confronted with a sagging economy, they refused to shirk on quality; as a result, most had slightly higher prices than their slumping counterparts, and they attributed their success, in part, to delivering superior goods and services while avoiding price wars.
    • Differentiation: Thirteen of the 20 firms studied simultaneously employed innovation strategies designed to regularly introduce new products, services, or processes. Five of the firms, all in manufacturing sectors, steered a substantial percentage of their annual revenue to new product development initiatives. Thus, the high-growth companies showed a consistent affinity for using aggressive strategies instead of taking a more conservative tack. Differentiation through marketing, however, was nowhere near as widespread. In fact, 15 of the 20 companies reported pursuing few to no traditional marketing activities, reasoning that the required investment wouldn’t be worth a limited short-term spike in sales. Instead, they relied on their sales team or Internet outreach to keep their existing customer base up to date about new products or services.
    • Customization: Eight of the 20 companies emphasized working closely with their customers to identify and produce tailored solutions, altering their product lines to meet their customers’ ever-changing criteria. An additional five firms, although producing more standardized items, also invited their customers to make small alterations or take advantage of complementary services. Interestingly, the successful firms largely eschewed market customization, that is, focusing on a niche sector. Despite the conventional wisdom that smaller firms can improve their performance by zeroing in a specific market segment, only five of the high-growth companies followed this advice. The rest assertively targeted the whole market, taking advantage of volatility to increase their market share. As one CEO told the authors, “Clearly, we targeted the competition: we tried to understand what they were good at and what they were bad at, and we just tried to be better than them.”

    Question 3_
    1. Airline industry
    2 . Technology ,Google
    3 . Manufacturing industry
    Strategies that stress cooperation among competitors are being used more. For collaboration between competitors to succeed, both firms must contribute something distinctive, such as technology, distribution, basic research, or manufacturing capacity. But a major risk is that unintended transfers of important skills or technology may occur at organizational levels below where the deal was signed. Information not covered in the formal agreement often gets traded in the day-to-day interactions and dealings of engineers, marketers, and product developers. Firms often give away too much information to rival firms when operating under cooperative agreements! Tighter formal agreements are needed. Perhaps the best example of rival firms in an industry forming alliances to compete against each other is the airline industry. Today there are three major alliances. With the addition of Continental Airlines, the Star Alliance has 25 airlines such as Air Canada, Spanair, United, and Singapore Airlines; the OneWorld Alliance has 10 airlines such
    as American, British Air, and LanChile; and finally, SkyTeam Alliance has 15 airlines such as Air France, Delta, and Korean Air. Firms are moving to compete as groups within alliances more and more as it becomes increasingly difficult to survive alone in some
    industries. The idea of joining forces with a competitor is not easily accepted by Americans, who often view cooperation and partnerships with skepticism and suspicion. Indeed, joint
    ventures and cooperative arrangements among competitors demand a certain amount of trust if companies are to combat paranoia about whether one firm will injure the other.
    However, multinational firms are becoming more globally cooperative, and increasing numbers of domestic firms are joining forces with competitive foreign firms to reap mutual
    benefits. Kathryn Harrigan at Columbia University says, “Within a decade, most companies will be members of teams that compete against each other.” Once major rivals, Google’s YouTube and Vivendi SA’s Universal Music Group have formed a partnership
    called Vevo to provide a new music-video service. Google provides the technology and Universal Music provides the content, and both firms share the revenues. The two firms
    now operate the stand-alone site Vevo.com. U.S. companies often enter alliances primarily to avoid investments, being more interested in reducing the costs and risks of entering new businesses or markets than in acquiring new skills. In contrast, learning from the partner is a major reason why Asian and
    European firms enter into cooperative agreements. U.S. firms, too, should place learning high on the list of reasons to be cooperative with competitors. U.S. companies often form
    alliances with Asian firms to gain an understanding of their manufacturing excellence, but Asian competence in this area is not easily transferable. Manufacturing excellence is a
    complex system that includes employee training and involvement, integration with suppliers, statistical process controls, value engineering, and design. In contrast, U.S. know-how
    in technology and related areas can be imitated more easily. U.S. firms thus need to be careful not to give away more intelligence than they receive in cooperative agreements with rival Asian firms.

    Question 4_
    Joint venture is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity. Often, the two or more sponsoring firms form a separate organization and have shared equity ownership in the new entity. Cooperative arrangements include research and development partnerships, cross-distribution agreements, cross-licensing agreements,
    cross-manufacturing agreements, and joint-bidding consortia. Nokia Corp. and Qualcomm recently formed a cooperative agreement to develop next-generation cell phones for North America to hit the market. Joint ventures and cooperative arrangements are being used increasingly because they
    allow companies to improve communications and networking, to globalize operations, and to minimize risk. Joint ventures and partnerships are often used to pursue an opportunity
    that is too complex, uneconomical, or risky for a single firm to pursue alone. Such business creations also are used when achieving and sustaining competitive advantage when an
    industry requires a broader range of competencies and know-how than any one firm can marshal. Strategic partnering takes many forms, including outsourcing, information sharing, joint marketing, and joint research and development.

    Question 5_
    Four important reasons why many mergers and acquisitions fail
    1. large or extraordinary debt
    2. inability to achieve synergy
    3. difficult to integrate different organizational cultures
    4. inadequate evalutaion of target

    Question 6_
    Google in 2009 began selling books online. This related diversification strategy led Google to digitize close to 10 million books by year’s end. Google cofounder Sergey Brin recently said, “Call me weird, but I think there are a lot of advantages to reading books online. Today’s monitors have great esolution and you don’t have to wait on the book to arrive once ordered.”Google stock in July 2009 rose above $400 per share as the company prepares to launch its own operating system for computers, a direct assault on the business of software giant Microsoft. Google’s strategic plan is to attack Microsoft in nearly all of its businesses, including browsers, where Google has 1.8 percent market share versus Microsoft’s 66 percent, smartphone operating systems (Google 1.6% versus Microsoft 10%), office suites (Google 0.04% versus Microsoft 94%). Google’s Chrome OS operating system will require users to be connected to the Internet, unlike Microsoft’s operating systems.

    Question 7_
    When new channels of distribution are available that are reliable, inexpensive, and of good quality.
    • When an organization is very successful at what it does.
    • When new untapped or unsaturated markets exist.
    • When an organization has the needed capital and human resources to manage
    expanded operations.
    • When an organization has excess production capacity.
    • When an organization’s basic industry is rapidly becoming global in scope.

    Question 8_
    Facebook buys WhatsApp for $22 billion
    Google buys Motorola Mobility for $12.5 billion
    Dell Inc agrees to buy EMC for $67 billion
    Microsoft buys LinkedIn for $26.2 billion
    There are many reasons why tech acquisitions happen: to acquire talent, to shut down a rising competitor, to gain access and ownership to patents, equipment, technologies etc, and at the very least, it is great fodder for the media. These acquisitions usually come with a hefty price tag, but the truth is that not all of them have good ROI. Most acquisitions are made not to have and own the product itself; instead, the giant tech firms are after the talent behind those products. Thus, the products are usually phased out, even as the people who originally created it are absorbed into the company. A prime example was when Yahoo bought, then closed down the smartphone browser called Rockmelt.

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  3. Name: Nigar Ismayilova
    Student number: 20166316
    Department: MBA

    A1
    Forward integration is a business strategy that involves a form of vertical integration whereby business activities are expanded to include control of the direct distribution or supply of a company’s products. This type of vertical integration is conducted by a company moving down the supply chain.
    1. When an organization’s present distributors are expensive or unreliable. When the availability of quality distributors is limited as to offer a competitive advantage to those firms that integrate forward. (Starbucks Inc. moves down closer to customers by acquiring many stores across the world up to 23,000 in 120 countries as at 2016, in order to expand its operation and to cut cost.)
2. When an organization competes in an industry that is growing and is expected to continue to grow markedly. (Apple Inc. has 361 stores all over the world.)
3. When an organization has both the capital and human resources needed to manage the new business of distributing its own products. (United Nations Children’s Fund (UNICEF) )
4. When the advantages of stable production are particularly high. 
5. When present distributors or retailers have high profit margins. (Construction industry)

    A2
    a) Product Differentiation Strategy
Small companies will often use a product differentiation strategy when they have a competitive advantage, such as superior quality or service. For example, a small manufacturer or air purifiers may set themselves apart from competitors with their superior engineering design. Obviously, companies use a product differentiation strategy to set themselves apart from key competitors. However, a product differentiation strategy can also help a company build brand loyalty.
    b) Keeping costs down: All the high-performing companies strove to keep their production budgets low and their prices competitive. However, even when confronted with a sagging economy, they refused to shirk on quality; as a result, most had slightly higher prices than their slumping counterparts, and they attributed their success, in part, to delivering superior goods and services while avoiding price wars.
    c) Customization: Focus involves a restriction of activities to only a part of the market (a segment) through.Providing goods and/ or services at lower cost to that segment.

    A3
    1 – Airline industry; airlines sell other airlines’ tickets. Although less common than it used to be, airlines still offer to sell their competitor’s product- a seat on a particular flight- typically to complete a round trip at a convenient time or to provide a connection to a city the first airline does not serve. This means airlines must have access to each other’s schedules, fares and availability on a current basis.
    2 – Software and technology industries – when a significant number of firms have more copy rights and patents rights, cooperation is the best strategy because other firms can easily retaliate.
    3 – The automotive industry. A good example is the 2003 joint venture of Peugeot and Toyota to share knowledge and parts to build a new urban car, which resulted in the Peugeot 107 and the Toyota Aygo.

    Reasons:
– There is a high cost requirement for the firm to compete in its industry from tools equipment and utilities.
– The industry benefits from low deal transaction costs

    Using an alliance with a competitor to acquire new technologies or skills is not devious. It reflects the commitment and capacity of each partner to absorb the skills of the other.

    A4
    1 – Siemens AG and Nokia Corp Joint Venture, it was formed in 2006
    2 – Microsoft and General Electric Joint Venture, Caradigm, in 2011.
    3 – Sony-Ericsson is a joint venture between Sony and the Ericsson. (Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company)

    A5
    1 – Integration difficulties
    2 – Not Focusing Enough On Customers And Sales.
    3 – Large or extraordinary debt
    4 – Limited or no involvement from the owners

    A6
    Diversification – expansion of the range of products and reorientation of sales markets, development of new types of production in order to increase production efficiency, obtain economic benefits, prevent bankruptcy. Such diversification is called diversification of production.
    Unrelated diversification – a new field of activity that does not have obvious links with existing business areas.
    Related diversification – Gmail and Google maps
    Unrelated diversification – Android, Mobile applications.

    A7

    Forward Integration is effective if:
1 – There are only few available and qualitative distributors in the industry;
2 – Distributors and retail firms have high profits;
3 – Distributors are very expensive, unreliable or aren’t able to satisfy requirements which are put by the company;
4 – There are expectations of significant growth in the branch;
5 – There are advantages of stable production and distribution;
6 – The company has enough resources and opportunities for management of new business.
    The backward integration is the most useful when:
1 – The current suppliers are unreliable or expensive;
2 – There are only a few small suppliers;
3 – The industry promptly extends;
4 – Suppliers get high profits;
5 – The company has necessary resources and opportunities for creation of new business.
    When market development offers chances of earning high profits.
When market development can lure more customers
When market development is associated with low risks.
When market development results in high confidence of the new firm/product.

    A8
    1 – Compaq acquired by HP 18.6 billion in 2001
2 – WhatsApp by Facebook 19 billion in 2014
3 – Dell Inc agrees to buy EMC for $67 billion in 2015
4 – Microsoft buys LinkedIn for $26.2 billion in 2016
    Acquisitions are now popular because they help to get rid of potential competition .As a result, the firm begins to make more profits from both its existing firm and the new acquired firm.

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  4. Name: Nigar Ismayilova
    Student number: 20166316
    Department: MBA

    A1
    Forward integration is a business strategy that involves a form of vertical integration whereby business activities are expanded to include control of the direct distribution or supply of a company’s products. This type of vertical integration is conducted by a company moving down the supply chain.
    1. When an organization’s present distributors are expensive or unreliable. When the availability of quality distributors is limited as to offer a competitive advantage to those firms that integrate forward. (Starbucks Inc. moves down closer to customers by acquiring many stores across the world up to 23,000 in 120 countries as at 2016, in order to expand its operation and to cut cost.)

    2. When an organization competes in an industry that is growing and is expected to continue to grow markedly. (Apple Inc. has 361 stores all over the world.)

    3. When an organization has both the capital and human resources needed to manage the new business of distributing its own products. (United Nations Children’s Fund (UNICEF) )

    4. When the advantages of stable production are particularly high. 
5. When present distributors or retailers have high profit margins. (Construction industry)

    A2
    1. Product Differentiation Strategy
Small companies will often use a product differentiation strategy when they have a competitive advantage, such as superior quality or service. For example, a small manufacturer or air purifiers may set themselves apart from competitors with their superior engineering design. Obviously, companies use a product differentiation strategy to set themselves apart from key competitors. However, a product differentiation strategy can also help a company build brand loyalty.
    2. Keeping costs down: All the high-performing companies strove to keep their production budgets low and their prices competitive. However, even when confronted with a sagging economy, they refused to shirk on quality; as a result, most had slightly higher prices than their slumping counterparts, and they attributed their success, in part, to delivering superior goods and services while avoiding price wars.
    3. Customization: Focus involves a restriction of activities to only a part of the market (a segment) through.Providing goods and/ or services at lower cost to that segment.

    A3
    1 – Airline industry; airlines sell other airlines’ tickets. Although less common than it used to be, airlines still offer to sell their competitor’s product- a seat on a particular flight- typically to complete a round trip at a convenient time or to provide a connection to a city the first airline does not serve. This means airlines must have access to each other’s schedules, fares and availability on a current basis.
    2 – Software and technology industries – when a significant number of firms have more copy rights and patents rights, cooperation is the best strategy because other firms can easily retaliate.
    3 – The automotive industry. A good example is the 2003 joint venture of Peugeot and Toyota to share knowledge and parts to build a new urban car, which resulted in the Peugeot 107 and the Toyota Aygo.

    Reasons:
– There is a high cost requirement for the firm to compete in its industry from tools equipment and utilities.
– The industry benefits from low deal transaction costs

    Using an alliance with a competitor to acquire new technologies or skills is not devious. It reflects the commitment and capacity of each partner to absorb the skills of the other.

    A4
    1 – Siemens AG and Nokia Corp Joint Venture, it was formed in 2006
    2 – Microsoft and General Electric Joint Venture, Caradigm, in 2011.
    3 – Sony-Ericsson is a joint venture between Sony and the Ericsson. (Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company)

    A5
    1 – Integration difficulties
    2 – Not Focusing Enough On Customers And Sales.
    3 – Large or extraordinary debt
    4 – Limited or no involvement from the owners

    A6
    Diversification – expansion of the range of products and reorientation of sales markets, development of new types of production in order to increase production efficiency, obtain economic benefits, prevent bankruptcy. Such diversification is called diversification of production.
    Unrelated diversification – a new field of activity that does not have obvious links with existing business areas.
    Related diversification – Gmail and Google maps
    Unrelated diversification – Android, Mobile applications.

    A7

    Forward Integration is effective if:
    
1 – There are only few available and qualitative distributors in the industry;
    
2 – Distributors and retail firms have high profits;

    3 – Distributors are very expensive, unreliable or aren’t able to satisfy requirements which are put by the company;
    
4 – There are expectations of significant growth in the branch;

    5 – There are advantages of stable production and distribution;
6 – The company has enough resources and opportunities for management of new business.
    The backward integration is the most useful when:

    1 – The current suppliers are unreliable or expensive;
    
2 – There are only a few small suppliers;

    3 – The industry promptly extends;

    4 – Suppliers get high profits;

    5 – The company has necessary resources and opportunities for creation of new business.

    When market development offers chances of earning high profits.
When market development can lure more customers
When market development is associated with low risks.
When market development results in high confidence of the new firm/product.

    A8
    1 – Compaq acquired by HP 18.6 billion in 2001

    2 – WhatsApp by Facebook 19 billion in 2014
    
3 – Dell Inc agrees to buy EMC for $67 billion in 2015
    
4 – Microsoft buys LinkedIn for $26.2 billion in 2016
    Acquisitions are now popular because they help to get rid of potential competition .As a result, the firm begins to make more profits from both its existing firm and the new acquired firm.

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  5. EMMANUEL ERONMONSERE OGOLOWA – 20167095
    MASTERS INTERNATIONAL BUSINESS
    TYPES OF STRATEGY
    1. Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with examples.
    Ans: The following situations illustrate forward integration as a good strategy.
    • Through mergers and acquisitions – An organisation can perform forward integration when it merges with or acquires another organization that is involved in the distribution of its products. In 2003, the purchase of DirectTV by News Corporation in the United States has proven to be a good strategy, as this has enabled News Corporation to use DirectTV’s satellite medium to distribute more of its news, movies and television shows by managing the process itself.
    • By controlling retail – One organisation that employs this strategy is American Apparel, a cloth manufacturing company based in Los Angeles, USA. AA manages every form of distribution in-house, including the high rent, high-profile retail stores, and its wholesale operation selling clothing to screen printers and boutiques. The company also controls its online store that sells throughout the United States and internationally, while internally managing its warehousing and distribution from their Los Angeles factory.
    • By establishing outlets – Near East University currently utilises this strategy to their benefit as the University also operates Foundation and High Schools, products of which would become students of the University in no distant time.
    • By creating monopoly – By monopolising the manufacturing and distribution process, the organisation is able to lower cost, which is then transferred to customers. Wal-Mart stores like Lemar uses this strategy to their advantage.
    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    Small businesses most widely use the following strategies
    • Market Penetration: Market penetration means growing sales of existing products in existing markets. For instance, Starbucks have started writing names of customers on coffee cups. The intention of this is to increase sales as a result of greater customer satisfaction.
    • Market Development –Market development means growing sales by launching existing products into new markets. If the target market for Coca-Cola is the US market for soft drinks, then when Coca-Cola took their products to Russia, that was an example of market development since the market potential for Coca-Cola increased.
    • Product Development: Here, the company intends to increase sales by launching new products into an existing market. An example of this would be Starbucks introducing a new premium coffee made with rare and exclusive beans.
    3. List three industries where cooperation among competitors is most likely and explain why.
    Three industries where cooperation is more likely among competitors are as follows;
    • Aerospace industry
    • Automobile industry
    • Technology industry
    Companies under the above industries often find it more cost effective to form a joint venture alliance with a competitor and take advantage of the innovations and strategies which their competitors employ, to manufacture their products and thereafter compete in the marketplace. Apple has partnered with Clearwell, Sony and Motorolla in the past for this purpose.
    4. Identify three joint ventures that have worked especially well in the past.
    Ans: Three joint ventures that have survived over the years are-
    • Bharti AXA General Insurance Company Ltd. is a joint venture between Bharti Enterprises and AXA business Group that operates in India. Bharti Enterprises shares 51% stake in the venture while AXA Group shares 49% stake. The company offers general insurance products to retail and commercial clients.
    • Fuji Xerox Co. Ltd. is a joint venture partnership between the Japanese photographic firm Fujifilm Holdings (75%) and the American document management company Xerox (25%) to develop, produce and sell xerographic and document-related products and services in the Asia-Pacific region. Its headquarters is in Midtown West in Tokyo Midtown, Akasaka, Minato, Tokyo, Japan. Fuji Xerox is the world’s longest running joint venture between a Japanese and an American company.
    • TATA Starbucks Private Limited, formerly known as Tata Starbucks Limited, is a 50:50 joint venture company, owned by Tata Global Beverages and Starbucks Corporation that owns and operates Starbucks outlets in India. The outlets are branded Starbucks “A Tata Alliance”.
    5. List four important reasons why many mergers and acquisitions fail.
    Four reasons why mergers and acquisitions fail are as follow;
    • Limited or no involvement from the owners
    • Cultural integration issues
    • Lack of clarity and execution of the integration process
    • Negotiations errors
    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
    Related diversification is when a business adds to or expands its existing product lines or markets. Hypothetically, a situation where google acquires WhatsApp Messenger as an expansion of its services into Instant Messaging is regarded as related diversification as its services would still be internet based.
    However, unrelated diversification is when a company adds new or unrelated products or services or markets to its line of business. Hypothetically, say same Google acquires a television or radio station. In this case, there is no synergy in the service delivery and organisations might want to do this to offset cash-flow or for cost efficiency.
    7. When would market development generally be the preferred strategy over backward or forward integration?
    It is preferred to use market development strategies when the company intends to attract new sets or groups of potential customers to its already existing products or services. Market development basically, is the use of an existing product or service offering to attract new customer market, whilst backward and forward integration are strategic initiatives companies may perform to reduce risks and interdependencies with external business partners in the supply chain. Companies often brainstorm multiple target market segments when developing a marketing plan. The first segments targeted with advertising are the ones you feel provide the best potential for profitability. As long as you have other potential markets, you can grow through market development. This is especially true when competitors haven’t already targeted the new potential market. You could add stores in new geographic regions with little to no competition.
    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    Four examples of technology acquisitions in the past 2 years are
    • Microsoft acquired LinkedIn for $26.2 billion in 2016
    • Facebook acquired WhatsApp for $22 billion in 2014
    • Dell Inc. acquired EMC for $67 billion in 2015
    • Avago Technologies acquired Broadcom for $37 billion in 2015
    This strategy has become as a result of larger technology companies wanting to gain more competitive advantage and larger market share, and also to diversify and strengthen their service offerings.

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  6. karzan qader hamad
    department/ innovation knowledge management
    student number/20169030
    Q1/ For word strategy is very useful when the market is falling companies con sell their product directly to acceterate the process of selling and to save a lot of money
    2-while producing a new item, it is better to sell item directly to the consumer s to introduce the item in a short time.
    3-fonword integration means eliminating steps ,and that is useful in all the aspect ,costs , time, and management.
    4-forword integration expands the company that use it, so in case of expanding a company , for word integration is the test use .
    5-if a company competes with other companies in a certain industry ,then forward industry
    is very help full.
    Q2// vertical integration Vertical integration describes when a company purchases or starts a company that it either buys from or sells to and integrates this new business into its own. Forward integration means it is integrating businesses toward the end customer; backward integration means it is integrating in the direction away from the customer. Backward vertical integration can be a part of a company’s strategy due to the competitive benefits it provides. A Simple, Hypothetical Example A simple example of backward vertical integration strategy is an ice cream company that buys a dairy farm. The company requires milk to make ice cream and either can buy milk from a dairy farm or other milk supplier or could own the dairy farm itself. This ensures that it will have a steady supply of milk at its disposal and that it will pay a reasonable price. This can protect the ice cream maker in the event that there are several other buyers vying for the same milk supply. Horizontal integration It is a type of integration strategies pursued by a company in order to strengthen its position in the industry. A corporate that implements this type of strategy usually mergers or acquires another company that is in the same production stage. For example, Disney merging with Pixar (movie production), Exxon with Mobile (oil production, refining and distribution) or the infamous Daimler Benz and Chrysler merger (car developing, manufacturing and retailing). The purpose of horizontal integration (HI) is to grow the company in size, increase product differentiation, achieve economies of scale, reduce competition or access new markets. When many firms pursue this strategy in the same industry, it leads to industry consolidation (oligopoly or even monopoly) company conglomerate An Example of a Company Conglomerate A conglomerate is a large, often multinational, corporation that owns companies in different industry sectors. Conglomerates gained popularity in the 1960s as companies that generally engaged in one line of business began diversifying their business models through leveraged buyouts and mergers and acquisitions. Acquisitions Initially, companies engaged in vertical combinations, whereby they merged with companies in similar lines of business (suppliers merged with distributors) for financial synergy. However, the acquisitions trend transitioned from supply-chain mergers to horizontal mergers, whereby companies acquired competitors in the same industry. As companies grew profitable, banks grew more lax in lending. This resulted in large corporations creating ingenious ways to generate synergy, and profits, by purchasing companies in completely different business sectors. General Electric An example of a successful conglomerate is General Electric, popularly known as “GE.” General Electric, formed by Thomas Edison in 1890, began as a lighting business and has since transformed into a conglomerate that is more synonymous with “general” than “electric.” Shortly after the company was formed, it engaged in horizontal mergers and other forms of expansion that resulted in producing radios, refrigerators and wind turbines. GE developed World War I aircraft and eventually became the largest manufacturer of jet engines through GE Aviation, a new line of business.
    Q3/1- mobile companies
    2-automobile companies
    3-cothing companies
    *these companies , sometimes ,cooperate because they work in an industry which is quite complex ,and sometimes they depend on each other for making special parts or acquiring a special product ,for example , Sony company cooperated with Iphone company to make the makes the camera of iphne7.
    Q4// One option is to agree to co-operate with another business in a limited and specific way. For example, a small business with an exciting new product might want to sell it through a larger company’s distribution network. The two partners could agree to a contract setting out the terms and conditions of how this would work. Alternatively, you might want to set up a separate joint venture business, possibly a new company, to handle a particular contract. A joint venture company like this can be a very flexible option. The partners each own shares in the company and agree on how it should be managed. In some circumstances, other options may work better than a business corporation. For example, you could form a business partnership. You might even decide to completely merge your two businesses. To help you decide what form of joint venture is best for you, you should consider whether you want to be involved in managing it. You should also think about what might happen if the venture goes wrong and how much risk you are prepared to accept. It’s worth taking legal advice to help identify your best option. The way you set up your joint venture affects how you run it and how any profits are shared and taxed. It also affects your liability if the venture goes wrong. You need a clear legal agreement setting out how the joint venture will work and how any income will be shared. See the page in this guide on how to create a joint venture agreement
    Q5/1 Ignorance While the parties to a merger or acquisition cannot exchange commercially sensitive information prior to being under common ownership, there is enough crucially important and legally permissible preparation work to keep an integration team busy for several months before day one. Most chief executives don’t know this and they waste the time that could be put to good use while they await clearance from the regulatory authorities. Good preparation means the integration can kick off on day one. Speed matters. 2 No common vision In the absence of a clear statement of what the merged company will stand for, how the organzisation will operate, what it will feel like, and what will be different compared to how things are today, there is no point of the convergence on the horizon and the organzisations will never blend. . 3 Team resourcing Resource requirements are very often underestimated. It can take two or three months to release the best players from daily business to join the integration team(s), find a backfill for them, sign up contractors to fill the gaps and set up the team’s infrastructure. Most companies start too late and are not ready on once the deal is completed. 4 Poor governance Lack of clarity as to who decides what, and no clear issue resolution process. Integrating organisations brings up a myriad of issues that need fast resolution or else the project comes to a stand-still. Again: speed matters, but with a sound decision-making process.

    Q6/Related diver diversification :for example when a mobile company expands :is score by buying on other wireless company in the some filed .
    2-we related divers fail :for example when a mobile company decides to go to a different business, like television or radio business.
    Q7/market development would be generally preferred in forward strategy as it targets in increasing the number of consumer .
    Q8/ Microsoft buys LinkedIn Microsoft wants to connect with you on LinkedIn A historic deal, for two reasons. LinkedIn is the first of the big social media sites to be bought up by one of the old-guard tech companies. Moreover, this is Microsoft’s biggest acquisition yet, we can only assume they have big plans for the professional networking app The strategy is to expand the capabilities of Microsoft in business aspect to create awareness of products and opportunites through linkedin Snapchat snaps up Bitstrips Remember Bitstrips? If you’re already nostalgic for the days when they were plastered all over Facebook, good news! Snapchat acquired them back in March and rolled them into their app as ‘bitmoji’. Snapchat paid $100 million for the privilege! Can you say bubble? Snapchat has been able to create bitstrip images for users for the fun. And it has really helped in cartoon communication between users and also enhanced ineteractions Samsung connects with Harman Samsung, the electronics and mobile device giant, acquired audio and automotive company Harman to the tune of $8 billion late this year. The acquisition is one of the year’s biggest in terms of price, and Samsung is betting big on connected cars with this one. Uber hails OTTO Uber bought the self-driving technology company OTTO back in August. You may remember OTTO from that truck that drove all that beer (who says tech has a drinking problem?) cross-country. The deal is also significant because it puts Uber closer to realizing its autonomous service strategy. However, it looks like there might be more hurdles to clear in 2017 than they expected. With this upgrade, not only has uber created more excitement but also has stepped up economically, more people will like to partake in new adventures and at the sam time they make more income as on demand Question 4 Kellogg Company Joins with Wilmar International Limited Anticipating China’s rise to the top of the food and beverage global market, Kellogg Company entered into a joint venture agreement with Wilmar International Limited for the purpose of selling and distributing cereal and snack foods to consumers in China. While Kellogg brings to the table an extensive collection of globally renowned products as well as their expertise in the industry, Wilmar offers marketing and sales infrastructure in China, including an extensive distribution network and supply chain. Joining together allows both companies to profit from a synergistic relationship. The Joint Venture of Hulu The 2008 joint venture launched by NBC Universal Television Group (Comcast), Fox Broadcasting Company (21st Century Fox), and Disney-ABC Television Group (The Walt Disney Company) to create the enormously popular video streaming website “Hulu” is one example of a large scale partnering of companies that has been very profitable. Though individually the companies are competitors over the U.S. airwaves, combining their efforts to provide streaming content to billions of homes, computers, and mobile devices proved a powerful way to increase revenues. The success of Hulu has potential buyers lining up with offers topping $1 billion.
    Wed 03:59

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  7. Assignment 2 – Types of Strategy
    İsmail TUNCAY 20167949

    1. Forward Integration strategy is effective when;
    a) Distributors or retailers have high profit margins,
    b) Few quality distributors are available in the industry and distributors are very expensive, unreliable or unable to meet with the firm’s distribution needs,
    c) The industry expected to grow significantly,
    d) The company has enough resources and capabilities to manage the new business,
    e) There are benefits of stable production and distribution.
    After production, until the goods meet with customers each part of marketing chain add an interest on the price. Sometimes the price difference between producers and the retailers, affects customer’s buying decision. In order to get rid of this problem, many producers try to shorten the line to customers. Many footwear and apparel companies have a flagship store or establishing outlets.
    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    a) Differentiation,
    A manufacturing firm may produce varying products to meet different types of needs and price expectations of customers. For example Vodafone in TRNC has many different packages related to customer needs.
    b) Joint Venture/Partnering,
    A joint venture involves two or more businesses pooling their resources and expertise to achieve a particular goal. The risks and rewards of the enterprise are also shared.
    c) Focus Strategies (Low cost-Best Value),
    Companies that use Focus strategies concentrate on particular niche markets and, by understanding the dynamics of that market and the unique needs of customers within it, develop uniquely low-cost or well-specified products for the market. Because they serve customers in their market uniquely well, they tend to build strong brand loyalty amongst their customers. This makes their particular market segment less attractive to competitors.
    3. List three industries where cooperation among competitors is most likely and explain why.
    Airline industry, payment cards and banks are the most known examples.
    By forming alliances Airline industry offers easy connections to almost any destination in the world especially regional ones. Each airline maintains its own individual style and cultural identity, bringing the richness of diversity and multiculturalism to the alliance. At the same time each airline shares a common dedication to the highest standards of safety and customer service. Since for an Airline company it’s impossible to reach all destinations by means of aircraft, pilot and service, it is inevitable to form cooperation.
    Two successful joint ventures, Visa and MasterCard, have designed a set of rules to manage the connection between members. By means of these rules, members may use both of these cards with the same connection. Among the other payment cards it creates preference difference for them.
    People want to access his/her money in the bank without time and place restrictions. Banks form alliance to share ATM/BTM’s with the chosen partners. By means of this alliance people are able to access money by using another bank’s ATM/BTM at anytime and anywhere.
    4. Identify three joint ventures that have worked especially well in the past.
    a) In 2006, Siemens AG of Germany and Nokia Corp of Finland formed a joint venture called Nokia Siemens Networks U.S. The company started operating fully on April 1, 2007 and has continuously operated since then in 150 countries. In 2011, the company was rated by measure of revenues as the fourth largest manufacturer of telecom equipment.
    b) The world’s largest drug company, Pfizer, and a Chinese pharmaceutical company, Zhejiang Hisun, formed a joint company in the Chinese city of Hang Zhou. The company, known as the Hisun-Pfizer joint venture, has a registered capital of U.S. $250 million. The emergence of the joint venture has been prompted by the decline in sales of Pfizer due to the expiration of its many products, including the cholesterol lowering drug Lipitor. According to Pfizer’s forecast, China would be sharing around 70% of the market and would become the second largest drug market in the world by the year 2015.
    c) Sony-Ericsson is a joint venture between Sony and the Swedish company Ericsson. Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company. Ericsson used to get chips from Philips, but in March, 2000, a fire destroyed the production facility of Philips. Facing an acute shortage of chips, Ericsson was prompted to form a joint venture with Sony. On February 16, 2012, Sony acquired Ericsson’s share in the venture and renamed the company as Sony Mobile Communications. Sony Mobile shifted its headquarters from Lund, Sweden to Tokyo, Japan on January 7, 2013.
    5. The fact that two companies have been consolidated on paper does not automatically translate into a successful business enterprise. Without much effort at all, it’s possible to take two moderately profitable companies and combine them into a single company that’s one heartbeat away from bankruptcy. For merger and acquisition firms there may be very different reasons to fail, related to firm’s and business field’s properties. But most common four reason may list;
    a) Bad match. Some mergers and acquisitions are doomed from the very beginning. No matter how good the consolidation looks on paper, corporate cultures and other factors may preclude the possibility of a successful consolidation experience. Take your time and make sure a business consolidation is the right move before you make any rash decisions.
    b) Wrong motivations. Companies pursue mergers and acquisitions based on a variety of motivations, some of which boil down to the personal vanity of the people at the top of the leadership pyramid. Mergers and acquisitions garner a lot of attention and create a huge ego boost for leaders. However, if your motivation is anything other than business growth and increased marketplace opportunities, you really have no business even thinking about a merger or acquisition.
    c) Unmanageable size. Sometimes the merger of two companies results in a significant larger company that is unmanageable by the current leadership team. This is especially true when two rapidly growing small businesses merge and become a much larger entity. Unless there are leadership assets in place who know how to run a larger business, the survival of the new business may be in jeopardy.
    d) Lack of strategy. In order to be successful mergers and acquisitions require planning and strategy. Haphazardly combining the missions, assets, workforce, and customers of two previously unrelated businesses is irrational and dangerous in today’s competitive economy.
    6. Online search has always been the main service and product of Google. The company initially capitalized on its search technology that it began developing since 1996. But it later diversified to different Internet-related products and services.
    An internet base Business Advertisement Search Engine maybe a related diversification example and self-driving taxi fleet maybe a unrelated diversification example.
    7. Market Development involves introducing present products or services into new segments of current market or new geographic areas. When an organization is very successful at what it does and has excess production capacity, new untapped or unsaturated markets exist and new reliable, inexpensive and high quality distribution channels are available market development may be preferred by using forward integration methods.
    8. In 2015 and 2016 many technology acquisitions took place. Examples are;
    a) The mobile chipmaker, Qualcomm acquired NXP Semiconductors for $38.5 billion.
    b) Microsoft buying LinkedIn for US $26 billion.
    c) Software Giant Oracle acquired NetSuite for US $9.3 billion.
    d) Samsung Electronics paid $8.9 billion for Harman International Industries.
    There are many reasons why tech acquisitions happen: to acquire talent, to shut down a rising competitor, to gain access and ownership to patents, equipment, technologies etc, and at the very least, it is great fodder for the media. Most acquisitions are made not to have and own the product itself; instead, the giant tech firms are after the talent behind those products. Thus, the products are usually phased out, even as the people who originally created it are absorbed into the company.

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  8. Name: Shwan mohammed ali
    studen no: 20169024
    Department : Banking and Accounting
    Assigment # 2
    1. Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with examples.
    (1) When existing distribution channels are considered to be reliable, inexpensive and of good quality. Such causes firms to gain a huge market share over its rivals.
    (2) The corporation is a market leader and enjoys huge success in the industry. A good example, can be pointed to Microsoft which is enjoying huge success in computer operating systems (Thompson & Strickland, (2001).
    (3) The market is considered to be unsaturated. A good example is when the market is still growing which leaves more room for make more profits. Integration in this case can reduce set-up costs and at the same time allowing the firm to reap more benefits from the integration (Priem & Butler, (2001).
    (4) More resources are available for such an activity. For instance, the firm might be having abundant financial resources to undertake forward integration and this can be feasible for financial institutions.
    (5) The firm is operating above normal production levels, that is, being characterised by excess production. Excess production implies less costs per unit of production and this translates to more profits (Thompson & Strickland, (2001).

    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    • Market development: Whereby firms begin to venture into new markets. For example, supplying the products in new geographical areas.
    • Market penetration: Whereby firms try to gain more market share from their existing markets. For example, Near East University competing against other universities in North Cyprus to gain more market share from other universities.
    • Product development: They can introduce a new product as was done by Near East when it first introduced aeronautics department in Kyrenia.

    3. List three industries where cooperation among competitors is most likely and explain why.
    • Biotechnology industries: this is because firms in biotechnology industries might be in high possession of Strong Intellectual Property Rights and hence by cooperating they obtain higher returns.
    • Telecommunications industry: this is because sunk costs are very high for potential especially for entrants. Such costs are either attributed to production expertise, regulatory knowledge or brand recognition.
    • Electronics industries: These industries are associated with a lot of patents which give owners of such patents a huge competitive advantage. However, when other firms also possess two or more patents, cooperation therefore makes it feasible for both firms to sufficiently gain a considerable share of the market.

    4. Identify three joint ventures that have worked especially well in the past.
    • Siemens AG and Nokia Corp Joint Venture
    • Cadbury Schweppes PLC Carlyle Group Joint Venture
    • The Hisun-Pfizer Joint Venture

    5. List four important reasons why many mergers and acquisitions fail.
    • One problem that causes joint ventures to fail is that managers who should collaborate daily in operating the venture are not involved in forming or shaping the venture.
    • If the venture benefits the partnering companies but may not benefit customers who then complain about poorer service or criticize the companies in other ways.
    • When the venture is not supported equally by both partners, which creates problems (Priem & Butler, 2001).
    • When the venture may begin to compete more with one of the partners than the other.

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.

    • Related diversification – mobile advertising.
    • Unrelated diversification – self driving cars
    7. When would market development generally be the preferred strategy over backward or forward integration?
    • Market development is associated with low risk.
    • Market development results in firms earning more profits (Pearce et al., 1997).
    • The firms are highly confident that the new products will be successful
    • The firm can gain a huge market share (Covin & Slevin, 1989).

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    • Skype acquired by Microsoft
    • Facebook acquiring WhatsApp
    • Beats acquired by Apple
    The popularity of this strategy lies in its ability to reduce competition and thus in the end the purchasing company enjoys huge competitive advantage and can make more profits. Moreover, such acquisition also offer a diversification benefit (Freeman, 2010).

    REFERENCES

    1) Burgelman, R. A., Maidique, M. A., & Wheelwright, S. C. (1996). Strategic management of technology and innovation (Vol. 2). Chicago: Irwin.
    2) Covin, J. G., & Slevin, D. P. (1989). Strategic management of small firms in hostile and benign environments. Strategic management journal, 10(1), 75-87.
    3) Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.
    4) Pearce, J. A., Robinson, R. B., & Subramanian, R. (1997). Strategic management: Formulation, implementation, and control. Chicago, Illinois: Irwin.
    5) Priem, R. L., & Butler, J. E. (2001). Is the resource-based “view” a useful perspective for strategic management research?. Academy of management review, 26(1), 22-40.
    6) Thompson, A. A., & Strickland, A. J. (2001). Strategic management: Concepts and cases. McGraw-Hill/Irvin.

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  9. Name: Nigar Ismayilova
    Student number: 20166316
    Department: MBA

    A1
    Forward integration is a business strategy that involves a form of vertical integration whereby business activities are expanded to include control of the direct distribution or supply of a company’s products. This type of vertical integration is conducted by a company moving down the supply chain.
    1. When an organization’s present distributors are expensive or unreliable. When the availability of quality distributors is limited as to offer a competitive advantage to those firms that integrate forward. (Starbucks Inc. moves down closer to customers by acquiring many stores across the world up to 23,000 in 120 countries as at 2016, in order to expand its operation and to cut cost.)
    
2. When an organization competes in an industry that is growing and is expected to continue to grow markedly. (Apple Inc. has 361 stores all over the world.)

    3. When an organization has both the capital and human resources needed to manage the new business of distributing its own products. (United Nations Children’s Fund (UNICEF) )

    4. When the advantages of stable production are particularly high. 
5. When present distributors or retailers have high profit margins. (Construction industry)

    A2
    a) Product Differentiation Strategy
Small companies will often use a product differentiation strategy when they have a competitive advantage, such as superior quality or service. For example, a small manufacturer or air purifiers may set themselves apart from competitors with their superior engineering design. Obviously, companies use a product differentiation strategy to set themselves apart from key competitors. However, a product differentiation strategy can also help a company build brand loyalty.
    b) Keeping costs down: All the high-performing companies strove to keep their production budgets low and their prices competitive. However, even when confronted with a sagging economy, they refused to shirk on quality; as a result, most had slightly higher prices than their slumping counterparts, and they attributed their success, in part, to delivering superior goods and services while avoiding price wars.
    c) Customization: Focus involves a restriction of activities to only a part of the market (a segment) through.Providing goods and/ or services at lower cost to that segment.

    A3
    1 – Airline industry; airlines sell other airlines’ tickets. Although less common than it used to be, airlines still offer to sell their competitor’s product- a seat on a particular flight- typically to complete a round trip at a convenient time or to provide a connection to a city the first airline does not serve. This means airlines must have access to each other’s schedules, fares and availability on a current basis.
    2 – Software and technology industries – when a significant number of firms have more copy rights and patents rights, cooperation is the best strategy because other firms can easily retaliate.
    3 – The automotive industry. A good example is the 2003 joint venture of Peugeot and Toyota to share knowledge and parts to build a new urban car, which resulted in the Peugeot 107 and the Toyota Aygo.

    Reasons:
– There is a high cost requirement for the firm to compete in its industry from tools equipment and utilities.
– The industry benefits from low deal transaction costs

    Using an alliance with a competitor to acquire new technologies or skills is not devious. It reflects the commitment and capacity of each partner to absorb the skills of the other.

    A4
    1 – Siemens AG and Nokia Corp Joint Venture, it was formed in 2006
    2 – Microsoft and General Electric Joint Venture, Caradigm, in 2011.
    3 – Sony-Ericsson is a joint venture between Sony and the Ericsson. (Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company)

    A5
    1 – Integration difficulties
    2 – Not Focusing Enough On Customers And Sales.
    3 – Large or extraordinary debt
    4 – Limited or no involvement from the owners

    A6
    Diversification – expansion of the range of products and reorientation of sales markets, development of new types of production in order to increase production efficiency, obtain economic benefits, prevent bankruptcy. Such diversification is called diversification of production.
    Unrelated diversification – a new field of activity that does not have obvious links with existing business areas.
    Related diversification – Gmail and Google maps
    Unrelated diversification – Android, Mobile applications.

    A7

    Forward Integration is effective if:
    
1 – There are only few available and qualitative distributors in the industry;

    2 – Distributors and retail firms have high profits;
    
3 – Distributors are very expensive, unreliable or aren’t able to satisfy requirements which are put by the company;
    
4 – There are expectations of significant growth in the branch;
    
5 – There are advantages of stable production and distribution;
    
6 – The company has enough resources and opportunities for management of new business.

    The backward integration is the most useful when:
    
1 – The current suppliers are unreliable or expensive;
    
2 – There are only a few small suppliers;

    3 – The industry promptly extends;

    4 – Suppliers get high profits;
    
5 – The company has necessary resources and opportunities for creation of new business.

    When market development offers chances of earning high profits.
When market development can lure more customers
When market development is associated with low risks.
When market development results in high confidence of the new firm/product.

    A8
    1 – Compaq acquired by HP 18.6 billion in 201
2
    2 – WhatsApp by Facebook 19 billion in 2014

    3 – Dell Inc agrees to buy EMC for $67 billion in 2015
    
4 – Microsoft buys LinkedIn for $26.2 billion in 2016
    Acquisitions are now popular because they help to get rid of potential competition .As a result, the firm begins to make more profits from both its existing firm and the new acquired firm.

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  10. Trish Chimhanda
    2015 9214
    Banking and Finance
    Assignment 2

    1. Five situations when forward integration is a particularly good strategy are as follows:
    i. When the retailers or distributors are unreliable , expensive or incapable of meeting the firms distribution needs. American Apparel is the classic example of a company that employs forward integration through controlling every aspect of distribution of its products. AA manages every form of distribution in-house, including the high rent, high-profile retail stores, and its wholesale operation selling clothing to screen printers and boutiques and the online store that sells throughout the United States and internationally. Warehousing and distribution is also managed internally from the company’s Los Angeles factory.
    ii. Present distributor have high profit margins. For example Çangar motors can acquire its dealers because they are making more profit and are making fast sales.
    iii. When advantages of stable production are high. Canadian communications giant Rogers is an example of forward integration. The company established Rogers TV, a subsidiary company that operates local television channels. The Rogers TV channels show programs such as cooking and talk shows, which are produced by Rogers-managed television studios. These provide Rogers with an opportunity to advertise and sell its digital products using an electronic version of a retail store.
    iv. When firm competes in an industry that is expected to grow markedly. DirectTV is a satellite TV company, and its purchase enabled News Corporation to use it as a medium to distribute more of its news, movies and television shows by managing the process itself.
    v. Availability of quality distributors is limited. For example Samsung Electronics Co Ltd acquired U.S. air conditioner distributor Quietside LLC as part of its drive to strengthen its “smart home” business. “Smart home” technology allows users to control multiple household appliances such as air conditioning using a mobile (smart) phone.
    2. Three most defined strategies that I feel are most widely used by small businesses include (1) market penetration because these small businesses are seeking an increased market share for present products or serviced in the present markets through greater marketing efforts especially with the use of social media in this technological era. For example Ameritrade, the on-line broker, tripled its annual advertising expenditures to $200 million to convince people they can make their own investment decisions. (2)Market development is now a popular strategy being used by small businesses as they are introducing present products or services to new geographical areas, countries and communities. For example Khuzendar Tiles maker introduces his product to Gulf markets. (3)Product development has become an objective for most small businesses as they are aiming to increase sales by improving present products, services or developing new ones. Khuzendar Tiles maker introduce Ceramic as a new product.
    3. Cooperation among competitors is more likely in
     Mobile Industry – they sometimes share suppliers for example Apple iPhone and Samsung may have common suppliers in their chain
     Automobile Industry- venture between two competitors can be a reason for project and product development as well as mutual benefit. In May 2012, Tesla and TMC announced their intent to cooperate on the development of electric vehicles, parts, and production system and engineering support. Tesla seeks to learn and benefit from Toyota’s engineering, manufacturing, and production expertise, while Toyota aims to learn from Tesla’s EV technology, daring spirit, quick decision-making, and flexibility.
     Entertainment and television industry – may want to promote their products and for educational purposes to the public hence maintaining their standards and reputation. For instance Disney World and Universal Pictures that are currently leading in the entertainment market and they are maintain their standards as well as promoting their products together as they combine tickets deals and packages .

    4. Three joint ventures that have worked especially in the past include :
     Disney world and Universal picture – combo tickets and packages
     Toyota and Tesla – With an aim to market the EV in the United States in 2012, prototypes will be made combining the Toyota RAV4 model with a Tesla electric powertrain.
     Nestlé and The Coca-Cola Company -Created in 2001 offers ready-to drink tea

    5. Reasons why mergers and acquisitions fail is because ;
     Conflict of culture and interest
     Poor communication
     Misgauging strategic fit
     Poor performance by one party

    6. Unrelated example for diversification done by Google
     Google mobile phones
    Related example for diversification done by Google
     Chrome operating system for computers
    7. Market development would be preferred over backward or forward interegration when
     New channels of distribution that are reliable, inexpensive, and good quality
     Firm is very successful at what it does
     Untapped or unsaturated markets
     Capital and human resources necessary to manage expanded operations
     Excess production capacity
     Basic industry rapidly becoming global

    8. 4 examples of technology acquisitions in the past 2 years are ;
     Microsoft acquired Sunrise Atelier, Inc.
     Facebook acquired Quickfire Networks
     Google acquired Launchpad Toys
     Sony acquired Toshiba image sensor
    This straegy is now popular because it is cost cutting , reduces competition and increase market share , overcomes entry barrier by acquiring an existing organisation as well as securing suppliers.

    References :
    http://www.fridgehub.com/News/675-samsung-acquires-us-air-conditioning-distributor#sthash.xrVre1T9.dpuf
    http://smallbusiness.chron.com/example-companys-forward-integration-37601.html
    https://www.coursehero.com/file/p14t6jq/Some-guidelines-for-when-forward-integration-would-be-an-especially-effective/
    https://www.tesla.com/it_CH/blog/tesla-motors-and-toyota-motor-corporation-formalize-agreement-develop-rav4
    https://www.attraction-tickets-direct.co.uk › … › Orlando Combination Ticket Packages
    http://www.nestle.com/media/news/nestle-coca-cola-company-end-beverage-partners-worldwide-joint-venture
    http://businessofaccouting.blogspot.com.cy/2010/04/advantages-and-disadvantages-of.html
    https://en.wikipedia.org/wiki/List_of_acquisitions_by_Sony_Corporation
    https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Facebook

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  11. MOHAMMADJAVAD SABBAGHIGHARAJEH
    20168970
    BUSINESS ADMINISTRATION

    Q1
    1 When an organization’s present distributors are especially expensive, unreliable, or incapable of meeting the firm’s distribution needs.
    2 When the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward.
    3 When an organization competes in an industry that is growing and is expected to continue to grow markedly.
    4 When an organization has both the capital and human resources needed to manage the new business of distributing its own products.
    5 when the advantages of stable production are particularly high.
    This strategy is causing turmoil in some industries. For example, Microsoft is opening its own retail stores, a forward integration strategy similar to rival Apple Inc., which currently has more than 200 stores around the world. Microsoft wants to learn firsthand about what consumers want and how they buy. CompUSA Inc. recently closed most of its retail stores, and neither Hewlett-Packard nor IBM have retail stores. Some Microsoft shareholders are concerned that the company’s plans to open stores will irk existing retail partners such as Best Buy

    Q2
    The three integrative strategies are forward integration; backward integration and horizontal integration are widely used by small businesses. Forward integration is the gaining of ownership or increased control over distributors or retailers. An example of forward integration is Gateway Computer Company opening its own chain of retail computer stores. Backward integration is the seeking of ownership or increased control of a firm’s suppliers. J.P. Morgan outsourcing its technology operations to firms such as EDS and IBM is an example of backward integration. Horizontal integration is the seeking of ownership or increased control over competitors. An example of horizontal integration is when Reader’s Digest Association acquired Reiman Publications LLC.
    Vertical integration allows a company to control the entire manufacturing process, from raw goods to the end consumer. This usually translates to better cost and quality control, since the company can set its own prices for raw goods and manufacturing.
    Horizontal integration allows a company to expand into new territories without the high expense of building from scratch, because an existing, profitable business is usually less expensive than the total cost of starting a new business. Horizontally integrated businesses may benefit from economies of scale.

    Q3
    1. Mobile and telecommunications industry – setting up costs are very high as well as refurbishment costs. Competing thus requires huge investment in these areas and in most cases firms do not have access to funds. Hence, when resources are insufficient, cooperation is the best strategy.
    2. Pharmaceutical industry – cooperation in these industries allows firms to enjoy from huge expenditure that is spent especially in areas of research and development (Grant, 1991).
    3. Software and technology industries – when a significant number of firms have more copy rights and patents rights, cooperation is the best strategy because other firms can easily retaliate.

    Q4
    Siemens AG of Germany and Nokia Corp of Finland formed a joint venture called Nokia Siemens Networks U.S. It is headquartered in Espoo, Greater Helsinki, Finland. Its need also arose due to the rising tendency in the low-cost Chinese manufacturers like Huawei Technologies Co. Ltd. The company started operating fully on April 1, 2007 and has continuously operated since then in 150 countries. In 2011, the company was rated by measure of revenues as the fourth largest manufacturer of telecom equipment.
    The Dow Chemical Company is one of the top three chemical manufacturers in the world, while Corning, Incorporated is a famous American manufacturer of glass. In 1942, a problem faced by the airlines brought them closer in an effort to solve the problem. The presence of moisture and the Corona discharge was an obstacle for the aircraft to fly at higher altitudes. The corona discharge also caused the production of hazardous products like ozone. In 1943, both companies formed an equally owned joint venture named Dow Corning. The joint venture company is headquartered in Midland, Michigan, USA. The Dow Corning product line includes: sealants, adhesives, and rubber for mold manufacturing, lubricants, release agents, liquid silicone, and many other products. The company has around 10,000 employees.
    Max Bupa Health Insurance Company Limited is an Indian assurance firm and a joint venture between Max India Limited and Bupa Finance plc UK, established for the purpose of carrying on health insurance in business in India. The company is incorporated under the Companies Act, 1956 with its registered office in New Delhi, with 11 branch offices across India. The firm offers health insurance products to individuals as well as corporations. It is the largest private medical insurer in the UK.

    Q5
    1.Poor governance Lack of clarity as to who decides what, and no clear issue resolution process. Integrating organisations brings up a myriad of issues that need fast resolution or else the project comes to a stand-still. Again: speed matters, but with a sound decision-making process.
    2.Poor communication Messages too frequently lack relevance to their audience and often hover at the strategic level when what employees want to know is why the organisation is merging, why a merger is the best course action it could take, in what way the company will be better after the merger, how it will “feel”, how the merger will affect their work and what support they will receive if they are adversely impacted.
    3.Poor programme management Insufficiently detailed implementation plans and failure to identify key interdependencies between the many workstreams brings the project to a halt, or requires costly rework, extends the integration timeline and causes frustration.
    4.Ignorance While the parties to a merger or acquisition cannot exchange commercially sensitive information prior to being under common ownership,

    Q6
    Related diversification value chains possess competitively valuable cross business strategy fits. Transferring competitively value expertise, technological know-how or other capabilities from one business to another. Combining the related activities of separate lower costs. It simply means when an organizations competes in a no growth or a slow-growth industry.
Unrelated diversification value chains are so dissimilar that no competitively valuable cross- business relationships exist. The revenues derived from an organization’s current products would increase significantly by adding the new, unrelated products. When the new products have counter cyclical sales patterns compared to present products.

    Q7
    Backward integration is a form of vertical integration that involves the purchase of, or merger with, suppliers up the supply chain. Companies pursue backward integration when it is expected to result in improved efficiency, cost savings, guaranteed supply and other benefits.
    Forward integration is a business strategy that involves a form of vertical integration whereby business activities are expanded to include control of the direct distribution or supply of a company’s products. This type of vertical integration is conducted by a company moving down the supply chain.

    Q8
    HP buying Autonomy
    Twitter acquisition of Vine
    Microsoft buying LinkedIn
    In most cases, firms have shown considerable support of this strategy because acquisitions have greatly made it feasible for firms to diversify into new markets, gain a huge market share and counter competitive pressure as supported by Mahoney and Pandian. Existing products are in the later stages of their life cycles.Business lacks knowledge or resources to develop organically. Speed of growth is a high priority. Competitors enjoy significant advantages that are hard to overcome

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  12. Hiwa khdir nabi
    Student number 20168790
    Department / economic

    1. Five situations when forward integration is a particularly good strategy according to Beyne, (2006), when the distribution channels are of high quality and can be reliably used to distribute products at a relatively low cost. Secondly, the availability of resources also determines whether forward integration is of good strategy. This implies that when firms are possessing an abundant amount of financial resources which can either be in the form of capital or even fixed assets, it becomes more feasible and good to integrate. Thirdly, forward integration is a good strategy when there is significant room for the firm to grow and earn huge profits (Fawcett & Magnan, 2002). Fourthly, the current progress status of the firm in that industry also determines whether forward integration is a good strategy and when there is a significant progress in the firm’s activities it is wise to integrate. Lastly, the firm must be characterised by falling costs and rising profit levels.

    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    This can be in the form of exploring other regions or different customers who can be categorised by gender or age. Such is known as market development (Feldstein, 2000). Small firms can also develop new products that are not being produced by large firms or modify existing products. This can include a product coming with new features such as free services, guarantees, self-service, promotional offers etc. they are also more likely try to compete in the same markets by engaging in specialization and or target marketing so as to penetrate the market.

    3. List three industries where cooperation among competitors is most likely and explain why.
    i. Telephone industry​​ii. Health and pharmaceutical industry​iii Oil industry

    The main reason is associated with high costs that are incurred in setting up structures and such costs make it impossible for firms that lack the necessary resources to compete because in order to compete they have to improve their services which is impossible without incurring high costs (Houlobek, 2007). Other firms may opt to cooperate so as to enjoy from activities that are available to other firms and can either be in the form of research and development. Moreover, firms can opt to cooperate so as to exploit market opportunities and make more profits (tacit collusion).

    4. Identify three joint ventures that have worked especially well in the past.
    i. Hewlett Packard and Disney
    ii. Nokia Corporation and Siemens AG
    iii. Chery Automobiles and Jaguar Land Rover forming Chery Jaguar Land Rover Automotive Company

    5. List four important reasons why many mergers and acquisitions fail.
    i. Ineffective ability to structure proper venture strategies.
    ii. Lack of competitive focus and strategies
    iii. Poor service delivery by the venture company
    iiii. Lack of venture support from venture partners
    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.�
    i. Related diversification – search adverts through Google Tv.
    ii. Unrelated diversification – automobile industry such as the Google Car (Houlobek, 2007)

    7. When would market development generally be the preferred strategy over backward or forward integration?
    i. When huge profits are to be earned from the market development exercise.
    ii. Potential risk levels are very low (Krugman & Venables, 1993).
    iii. When the firm stands a huge chance to succeed after the market development exercise.
    iiii. It is highly feasible to gain a significant market share (Scitovsky, 2013).
    v. Market development costs are very low as compared to both backward and forward integration (Beyne, 2006)

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years.
    i. Avago Technologies agrees to buy Broadcom for $37 billion in 2015
    ii. Microsoft buys LinkedIn for $26.2 billion in 2016
    iii. Facebook buys WhatsApp for $22 billion in 2014
    iiii. Dell Inc agrees to buy EMC for $67 billion in 2015 (World Economic Forum, 2015).

    Acquisitions are popular because they help to drive competition and cause the acquiring firm to gain more market share. By doing this, the firm can grow significantly causing them to earn more profits.

    REFERENCES
    1. Beyne, E. (2006, June). The rise of the 3rd dimension for system intergration. In Interconnect Technology Conference, 2006 International (pp. 1-5). IEEE.
    2. Fawcett, S. E., & Magnan, G. M. (2002). The rhetoric and reality of supply chain integration. International Journal of Physical Distribution & Logistics Management, 32(5), 339-361.
    3. Feldstein, M. (2000). Aspects of Global Economic Intergration: Outlook for the Future (No. w7899). National Bureau of Economic Research.
    4. Houlobek S. (2007, December 19). The challenges facing Google’s diversification. Retrieved March 25, 2017, from http://www.dmnews.com/marketing-strategy/the-challenges-facing-googles-diversification/article/98805/
    5. Krugman, P., & Venables, A. (1993). Integration, specialization, and the adjustment (No. w4559). National Bureau of Economic Research.
    6. Scitovsky, T. (2013). Economic Theory and Western European Intergration (Vol. 9). Routledge.

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  13. Name : Amanda Antonio
    Student No/: 20168444
    Department: Tourism and Hotel Management

    1. Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with example

    According to David et el, forward integration involves a company gaining ownership or increased control over distributers or retailers. This strategy offers different advantages to a company like, gaining a competitive advantage over its competitors, be able to control costs within the industry and have more control over its distribution and access of resources
    There are different situations which may encourage a company to forward integrate itself, which are:
     When the advantages of stable production are high. For example, the 2003 purchase of Direct TV by News Corporation. This acquisition enabled the News Corporation to use Direct TV as a medium to distribute more of its news, movies and television shows by managing the process itself.
     When the availability of quality distributors is so limited as to offer a competitive advantage. For example, the American Apparel has forward integrated through controlling every aspect of distribution of its products from distribution in house, high profile retail stores, wholesale operation selling clothes to screen printers and many others.
     When a company is competing in an industry that is growing it can forward integrate to establish more outlets. For example, Canadian communications giant Rogers established Rogers TV, a subsidiary company that operates local television channels. This provided Rogers with an opportunity to advertise and sell its digital products using an electronic version of a retail store.
     When a company’s distributors are expensive may lead it to forward integrate there by creating a monopoly in the industry. This could enable the company to monopolize the market for its products through control of both raw materials and finished product. Organizations such as the Federal Trade Commission’s Bureau of Competition exist to prevent this.
     When a company has both the capital and resources to manage distributing their own products. For example, natural health care products company Comvita purchased its Hong Kong distributor Green life Ltd which allowed the company to quickly and effectively launch new products into the Asian market as a result of its vast resources and capital.

    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    Small businesses are privately owned corporations, partnerships, or sole proprietorships that have fewer employees and/or less annual revenue than a regular-sized business or corporation, (wekipedia.com). These small businesses often use market penetration, market development and product development strategies to increase its growth and sales in the industry it competes in.
    According to Joseph (2017), Market penetration is a measure of the percentage of sales volume an existing product or business achieves in relation to the competition. Small- medium enterprises (SMEs) make use of this strategy more often in an effort to increase its sales and growth. A small business can attempt to penetrate a market by making use of different market penetration strategies of price adjustments, increased promotions, more distribution channels and product improvements.
    A small business can make use of the market penetration strategy by adopting increased promotions for its products. The company may launch an advertising campaign to generate greater brand awareness or implement a short-term promotion with a finite ending date. For example, in Zimbabwe Chicken Slice a fast food establishment made use of the strategy within the first years it started operation. The company used of a famous Urban Groove artiste Winky D to advertise its products for a period of a year to create a brand that “a good son in law comes home with a chicken slice”. This helped the company to increase its sales as its customers bought the product to feel more associated with the celebrity.
    Small businesses can also make use of the market development strategy to increase its market, sells and growth. According to Root III (2017), market development is the process of growing your customer base and establishing yourself as an industry leader. In addition to the above company, Chicken Slice has also taken up this strategy by introducing its existent products and services to new geographic areas of Chivhu in Zimbabwe. This move enabled the company to increase its market share as well as its customer base, as this market had not been tempered in to.
    Moreover small businesses can take up product development as a strategy to increase its sells and market growth. Richards (2017) defined product development as a way for businesses to stay ahead of the competition and continue to appeal to the changing needs of existing customers. For example a telecommunications company in Zimbabwe, Telecel adopted this strategy by seeking increased sales through modifying its present products and services. The company manged to offer better telephone packages (of browsing bundles and calling tariffs promotions) at a lower price than its competitors there by increasing its market share in the country.

    3. List three industries where cooperation among competitors is most likely and explain why.

     Retail outlets
     Automotive companies
     Software companies
    Cooperation and competition can co- exist among business competitors in the same field. The company would expect its competitor to be different and see it as an opportunity to learn from each other and to both compete in the marketplace. However, the company’s proprietary technology, methods, and ingredients remain off limits with many other aspects of a business that can be shared (Sentinelsource.com).
    These companies can also visit each other’s facilities to see and learn best practices, swapping executives for six months, establishing joint ventures to share costs when providing a product for the benefit of the industry, meeting with each other to discuss market challenges and seeing how the competition brings new quality products or services to market.
    A good example, in the automotive industry is the 2003 joint venture of Peugeot and Toyota to share knowledge and parts to build a new urban car, which resulted in the Peugeot 107 and the Toyota Aygo.
    Benchmarking is another way that companies cooperate with its competitors. This allows the company to compare it’s self with others, in particular its competition. For example, two family-owned electrical contractors in St. Louis swapped family members to learn the competencies needed for success from a competitor.
    When product-development expenditures are too large for a single competitor to incur, joint ventures emerge to share the cost and technology of development. For example, this is a common practice in the aerospace and automotive industries. Encouraging discussions among competitors about market trends, challenges and measures of success is where trade associations thrive in serving the cooperative side among competitors.

    4. Identify three joint ventures that have worked especially well in the past.

    Informory.com (2017), defines a joint venture as the joining of two or more business entities comprised of individuals, corporations, or governmental entities. The purpose of joining is to synergistically combine wealth resources and expertise to operate one business entity with a joint proprietary interest, joint management, and profit and loss sharing. The joint venture companies are expected to have a contractual agreement of specific time-bound objectives with a unique identity of the entity to have an ownership interest, common objectives, profit/loss sharing, and common management.

    • Siemens AG and Nokia Corp joint venture
    This joint venture of Siemens AG Germany and Nokia of Finland was formed in 2006 and got fully operational in April 2007. This joint venture was called Nokia Siemens Network U.S. The joint venture was prompted by mergers in the industry like that of Alcatel with Lucent, and low cost chines manufacturers like Hauwei Technologies Co.Ltd. This joint venture was successful in that it managed to operate in 150 countries and the company was rated by measure of revenue as the fourth largest manufacturer of telecom equipment.
    • The Hisun-Pfizer joint venture
    Pizer and a Chinese pharmaceutical company Zhejian Hisun formed a joint venture in Hang Zhou city. This joint venture was reported to have registered a capital of US $250 million with Hisun and Pfizer having shares of 51%- 49% of stake respectively. The joint venture was prompted by the decline in sales of Pfizer due to the expiration of many of its products. According to Pfizer’s forecast, “China would be sharing 70% of the market and would become the second largest drug market in the world by the year 2015”.
    • Sony Ericsson
    This is a joint venture formed between Sony a mobile phone manufacturing company and Ericsson a Swedish telecommunications equipment manufacturing company. The joint venture was prompted by lack of supplies for manufacturing chips to Ericsson by Philips, whose production facility had been destroyed by a fire, resulting in a joint venture between Ericsson and Sony. In February 2012 Sony acquired Ericsson’s share in the venture and renamed the company to Sony mobile communications.

    5. List important reasons why mergers and acquisitions fail.

    • No common reason
    • Actual cost of a difficult integration and high cost of recovery
    • Theoretical valuation vs the practical proposition of future benefits
    • Cultural integration issues

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.

     Related diversification is when a business expands its activities into product lines that are similar to those it currently offers. For example, google can expand its products by offering Maps and Automobile search services.
     Unrelated diversification is when a business expands its activities into product lines that are not similar to those it is currently offering. For example, google can expand its products by offering advertisements for different companies.

    7. When would market development generally be the preferred strategy over backward or forward integration?
    They are many variables that would lead a company to take up market development strategy as to that of forward or backward integration which include the following factors:
    • When new channels of distribution are available that are reliable, inexpensive, and of good quality
    • When a company is very successful at what it does
    • When new untapped or unsaturated markets exist
    • When a company has the needed capital and human resources to manage expanded operations
    • When a company has excess production capacity
    • When a company’s basic industry is rapidly becoming global in scope

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.

    An acquisition is a corporate action in which a company buys most, if not all, of another firm’s ownership stakes to assume control of it (investopidea.com).

    Examples of technology acquisitions in the past 2 years

     Microsoft acquired Linkedln for 26,2 billion in 2016
     Face book acquired Whatsapp for 19 billion in 2014
     HP acquired Massachusetts-based simplivity for 650 million in 2017
     HP acquired San Jose-based Cloud Cruiser in 2017

    The strategy of acquision has become more popular as it has many advantages it provides to acquiring companies.

    o Speed. Acquisitionst offers a company an opportunity to quickly acquire resources and core competencies not currently held by the company. It allows the company to instantaneously entre into new product lines and markets, usually with a recognized brand or positive reputation, and existing client base. In addition, the risks and costs typically associated with new product development can drop dramatically.
    o Market power. An acquisition will quickly build market presence for a company there by increasing its market share while reducing the competition’s stronghold. Where competition is high, growth through acquisition can reduce competitor capacity and level the playing field.
    o New resources and competencies. Through acquisition a company may have multiple advantages, ranging from immediate increases in revenues to improving long term finances making it easier to raise capital for other growth strategies.
    o Financial gain. Acquiring organizations with low share value or low price earnings ratio can bring short-term gains through asset stripping.
    o Reduced entry barriers. Acquiring an existing entity can often overcome formerly challenging market entry barriers while reducing risks of adverse competitive reactions. There by making it easy for the company to enter new markets.

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  14. Assignment 2 – Types of Strategy
    Lecturer: Dr. Karen E. Howells
    Name: Tafadzwa Nyanyiwa
    Student No: 20168652

    QTN 1

    In a normal product distribution channel, a manufacturer makes a good and then sells it to a wholesaler. The wholesaler then sells it to a retailer that markets goods to end customers. With forward integration, a manufacturer or wholesaler carries on subsequent steps in the distribution process, for example a wheat farmer acquiring the distribution system of the wheat, which includes the milling, and bakery. Below are scenarios when Forward integration is a good strategy.
    1. A company implements forward integration strategies when it wants to realize economies of scale and increase its industry market share. A manufacturing company, for example, has the ability to set up an online store and use digital marketing to sell its products. Previously, it had to use retail companies and marketing firms to effectively sell the products, but in this case clients can buy directly from the supplier or producer.

    2. When current retailers and distributors are attaining high profit margins, for example wheat farmers may wish to venture in the baking industry as a result of increased profits.

    3. When the market is young and the company must forward integrate to develop a market, or the market is declining and independents are pulling out of adjacent stages, for example a small wheat farmer producer can control and own bakeries so as to increase and develop its market share, hence increased growth.

    4. When the organization has high production facilities to meet the demand of customers. In this case they can thus control the market as the supplier is able to eliminate shortages hence ensures that demand is met. For example a supplier of car parts can acquire a car assembly and car sale. This will result in increased growth, market share and increased profitability.

    5. When the availability of quality distributors is limited. In this case the supplier or producer will thus take over or acquire the supply of goods and services so as to increase their market share and profits. For example fuel producers can acquire outlets such as Total, BP, Sasol only to mention a few.

    QTN 2
    There are three different types of strategies in business that can be used and these are: differentiation, overall cost leadership, and focus. Any of these business strategies can be effective in the long term.
    • Differentiation
    In this case, the company must prove to the customer that they are different and better than the competition. In differentiation, the business strategy is less concerned with price. For example Starbucks, charges more for its coffee than Dunkin’ Donuts. But it differentiates itself by focusing on high-quality products and sustainability, and by cultivating a brand image as the coffee of choice for the busy professionals.
    • Cost Leadership
    In this case the business main aim is to be the cheapest provider of its product or service. Wal-Mart is the perfect example of cost leadership. They focus on providing a wide range of goods at affordable prices. This will result in the sale of massive scale, hence the business will make small profits but would have sold large volumes within a short time. This will result in increased market share as consumers prefer affordable goods, thus giving the company a competitive advantage.

    • Focus
    This is also regarded as a niche business strategy which focuses on one small portion of the market. The company will aim at fulfilling a need that perhaps fewer people have, but there’s less competition from other businesses, for example advertising and selling pet food such as dogs, cats, birds etc., and advertising it in a pet magazine, the company will be reaching out for and targeting people who own or are interested in dogs, cats (pet animals)

    QTN 3

    Industries where cooperation among competitors is most likely are as follows:
    • Software electronics or mobile companies, For example Samsung and LG

    • Automobile/car manufacturing companies. A good example is the 2003 joint venture of Peugeot and Toyota to share knowledge and parts to build a new urban car, which resulted in the Peugeot 107 and the Toyota Aygo.

    • Clothing companies, for example Nike and Adidas

    Reasons for cooperation includes, the need to share information as both companies mutually benefit.
    In addition, when product-development expenditures are too large for a single competitor to incur, joint ventures emerge to share the cost and technology of development. This remains a common practice in the aerospace and automotive industries. Encouraging discussions among competitors about market trends, challenges and measures of success is where trade associations thrive in serving the cooperative side among competitors.

    QTN 4
    A joint venture is a contractual business undertaking between two or more parties.Companies choose to enter joint ventures in order to share strengths, minimize risks, and increase competitive advantages in the market place. Joint ventures can be distinct business units in this case a new business entity may be created for the joint venture or collaborations between businesses the know-how, the latter the means.
    Three joint ventures that have worked especially well in the past are as follows,
    • A cooperation between Japanese conglomerate Sony and Shanghai Oriental Pearl Group is another example. China had banned game consoles from 2000 until January 2014, which caused companies such as Sony difficulty in penetrating the Chinese market. The joint venture with the Chinese company helps to market Sony’s PlayStation products in the country

    • The 2003 joint venture of Peugeot and Toyota to share knowledge and parts to build a new urban car, which resulted in the Peugeot 107 and the Toyota Aygo.

    • Another example of joint venture is a cooperation among News Corporation, Disney and NBC Universal, which together formed Hulu, an online video streaming site. These giants in the industry cooperate and combine their programs instead of competing with each other.

    QTN5
    The major reasons why many mergers and acquisitions fail are as follows:
    1. Lack of clarity and execution of the integration process
    A major challenge for any M&A deal is the post-merger integration. A careful appraisal can help to identified key employees, crucial projects and products, sensitive processes and matters, impacting bottlenecks, etc. Using these identified critical areas, efficient processes for clear integration should be designed, aided by consulting, automation or even outsourcing options being fully explored
    2. Misgauging Strategic Fit
    If the acquisition is too far outside the parent company’s core competency, things might not work the way they are expected for example a company that sells to its business customers chiefly through catalog and Internet sales must be cautious about acquiring a company that relies on direct sales. Similarly, a company whose traditional strength lies in selling products to businesses must strategize before making a foray into a consumer-oriented business.
    3. Poor governance Lack of clarity as to who decides what, and no clear issue resolution process. Integrating organizations brings up a myriad of issues that need fast resolution or else the project comes to a stand-still. Again: speed matters, but with a sound decision-making process.
    4. Poor communication Messages too frequently lack relevance to their audience and often hover at the strategic level when what employees want to know is why the organization is merging, why a merger is the best course action it could take, in what way the company will be better after the merger, how it will “feel”, how the merger will affect their work and what support they will receive if they are adversely impacted.
    5. Poor program management insufficiently detailed implementation plans and failure to identify key interdependencies between the many work streams brings the project to a halt, or requires costly rework, extends the integration timeline and causes frustration.

    QTN 6
    Related diversification is when a business adds or expands its existing product lines or markets. For example, google also have a section for YouTube and Gmail.

    On the other hand, unrelated diversification is when a business adds new, or unrelated, product lines or markets. For example, google have diversified into the automobile industry and have developed a self-driving car. The Google self-driving car project is now Waymo, which stands for a new way forward in mobility. It is a self-driving technology company with a mission to make it safe and easy for people and things to move around.
    QTN 7

    Market development refers to the process by which a company develops its existing market rather than looking for new markets. The company looks for new buyers to pitch the product to a different segment of consumers in an effort to increase sales.
    Market development would be preferred mainly When new channels of distribution are available that are reliable, inexpensive and of good quality. This will result in increased productivity.
    Market development is a preferred strategy over backward or forward integration especially when new unsaturated markets exist and also when an organization has excess production capacity.
    In addition, market development will generally be the preferred strategy over backward or forward integration if the market is relatively attractive and also if the business is able to adapt to the new market maintaining its current competitive advantage in the new market.

    QTN 8

    The examples of technology acquisitions in the past 2 years are:
    The acquisition of YouTube by Google significantly boosted Google’s own stock price (upon announcement of the acquisition it went up by more than the amount they were paying for YouTube), resulted in the shuttering of Google Video, and catapulted Google into the leadership position for online video, at least measured by viewers if not by profitability.
    Some of the major acquisition are:
    1. Microsoft acquisition of Hotmail
    2. Twitter acquisition of Vine
    3. Facebook’s acquisition of WhatsApp
    The current trend is for acquisitions rather than mergers as most businesses growing through acquisition will find a number of other competitive advantages as well, ranging from catching the competition off guard to instant market penetration.
    Acquisition is one of the most time-efficient growth strategies. It offers the opportunity to quickly acquire resources and core competencies not currently held by the company.
    In addition an acquisition will quickly build market presence for the company, increasing market share while reducing the competition’s stronghold. Where competition has been particularly challenging, growth through acquisition can reduce competitor capacity and level the playing field. Market synergies are achieved.
    Businesses may choose acquisition as a route for gaining resources and competencies currently not held. These can have multiple advantages, ranging from immediate increases in revenues to improving long term financial outlook to making it easier to raise capital for other growth strategies. Diversity and expansion can also help a company to weather periods of economic or market slump.
    Mores, acquiring organizations with low share value or low price earning ratio can bring short-term gains due to assets stripping. Synergy between the surviving and acquired organizations can mean substantial cost savings as well as more efficient use of resources for soft financial gains.
    Acquisition is trending more than mergers as acquiring an existing entity can often overcome formerly challenging market entry barriers while reducing risks of adverse competitive reactions. Market entry can otherwise be a costly proposition, involving market research among other upfront expenses, and take years to build a significant client base.

    References
    http://yourbusiness.azcentral.com/example-companys-forward-integration-28860.html
    http://advantagefamily.com/content/different-types-of-strategies-in-business
    http://www.sentinelsource.com/opinion/columnists/guest/competitors-can-benefit-from-cooperation/article_6f647f7a-d758-5add-9492-63f58a6e4d6f.html
    http://www.investopedia.com/articles/investing/111014/top-reasons-why-ma-deals-fail.asp
    http://www.businessinsider.com/why-acquisitions-fail-2012-10
    https://en.wikipedia.org/wiki/Joint_venture
    http://www.infoentrepreneurs.org/en/guides/joint-ventures-and-partnering/
    The Top Reasons Why M&A Deals Fail | Investopedia http://www.investopedia.com/articles/investing/111014/top-reasons-why-ma-deals-fail.asp#ixzz4cF0422WH
    https://www.google.com.cy/search?q=Diversification&rlz=1C1AFAB_enZA503ZA561&oq=Diversification&aqs=chrome..69i57.11014j0j4&sourceid=chrome&ie=UTF-8#dobs=diversification
    http://www.investopedia.com/articles/investing/111014/top-reasons-why-ma-deals-fail.asp
    http://www.businessdictionary.com/definition/joint-venture-JV.html

    Like

  15. Name: Rufaro Denise Chipindu
    Department: Business Administration
    Student Number: 20165446
    Assignment 2: Types of Strategy

    1. Identify five situations when forward integration is a particularly good strategy and illustrate your answer with examples.
    Forward integration is the purchase of assets or facilities that move the company closer to customer such as a Computer Manufacturer that acquires a retail which specialises in computer products (Rugman and Collinson, 2012).

    Forward integration allows the business to be closer to the end use or consumers, gives the business greater control in the marketplace and can guarantee outlets for its products. The five situations when forward integration is a particularly good strategy:

    i. Existing distributors and retailers are expensive and not able to meet the distribution requirements of the firm. For instance, vehicle manufacturing company such as Audi may acquire an auctioning company such as ABC auctions as a way to eliminate the hustle of a distribution chain.
    ii. When there are no quality distributors available this gives competitive edge to the firm over its competitors. For example, BMW may opt to buy shares in Cangar Motors in North Cyprus due to the fact there is unavailability of reputable companies operating within the country.
    iii. When an organization has resources in terms of capital and human resources to manage and finance to meet the expenses of distribution channels. For example, Econet Zimbabwe acquired Steward Bank because it had more money in the reserve section and had enough employees who could manage the acquired bank.
    iv. When the organization has high production facilities to meet the demand of customers. Forward integration will strengthen organization value chain from production till sales and support of the products. For instance, Coca cola Zimbabwe acquired shares in Spar Supermarket in order to increase distribution of their products.
    v. When the current retailers or distributors have high margin which increase the cost of the product and will result in high price of the product. By implementing forward integration company can reduce the cost of distribution and lower the price of the products to increase its sales. For example, Apple may buy some of its distributors as a way to control the price of their products so as to compete with HP, IBM and Samsung.

    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.

    A small business is defined as an independently owned and operated company that is limited in size and revenue thus depending on the industry in which it operates in (Jagdish, 2004). The three strategies used by small business are horizontal integration, market penetration and related diversification.

    Market Penetration
    The activity or fact of increasing the market share of an existing product, or promoting a new product, through strategies such as bundling, advertising, lower prices, or volume discounts. Market penetration is a way for a business to increase its profits by taking advantage of its existing skills, experience, and knowledge about its target markets. It is a popular strategy for small businesses.
    For instance, Netflix an online, mail-order and streaming movie rental company was launched in 1997. The company used low prices of renting a DVD at that time in order to attract customers away from Blockbuster hence leading to Blockbuster demise.
    Small businesses can also try to convince existing customers to buy a product more often. For instance, Yangzhou Starlight Company which manufactures Toothbrush may advertise that dentists recommend replacing a toothbrush every three months hence attracting customers form their competitors.

    Horizontal Integration
    Horizontal integration, also known as lateral integration, describes the merging of two or more companies at the same point in the production process in the same or different industries. It amounts to expanding sideways at the point(s) in the value chain that the company is currently engaged in. For example, a boutique shop like Calliope may decide to joint venture with Vans as a way to increase their market share in North Cyprus.

    Related Diversification
    This is adding new but related products or services in the market. When a company expands into a related industry, one having synergy with the company’s existing lines of business, creating a situation in which the existing and new lines of business share and gain special advantages from commonalities such as technology, customers, distribution, location, product or manufacturing similarities, and government access. For instance, an Electronics repair shop adds to its portfolio of services the renting of appliances to the customers for temporary use until their own are repaired.

    3. List three industries where cooperation among competitors is most likely and explain why.

    Cooperation is important because it allows people and groups to work together to achieve a common goal or derive mutual benefits. The three industries were cooperation among competitors is most likely are automobile, food and airline industry.

    Automobile Industry
    Welle (2017) stated that the car industry is becoming a giant web of special relationships, joint ventures and mergers. Automobile manufacturers are increasingly working with their competitors on technical projects and development alliances – a trend that is triggered by the economic meltdown and the expense of developing green technology. For instance, BMW, Daimler, VW and Audi announced recently that they would launch new traffic monitoring services next year which give drivers a view of road conditions miles ahead.

    Welle (2017) stated the following reasons as the main aim that automobile industry enters into cooperation’s:

    • Cost-Sharing
    German premium car manufacturer BMW has worked together with Daimler, General Motors and Chrysler on hybrid technology. It’s also shared the costs of developing small four cylinder engines with the Peugeot group, PSA. Now BMW and Daimler are looking at developing new hybrid engines together. Car manufacturers that produce less than three million cars annually need these kinds of alliances to survive. There are some car manufacturers that are quite dependent on cooperation and this why car manufacturers try to work with several car manufacturers at the same time. That means that if one partner walked out, they would have other partners. This is an effect way of reduces cost in that the costs incurred during the alliance is shared hence it helps the organisation to save money.

    • Bulk Buying
    A few years ago BMW realized that to stay financially healthy, it had to cut material costs by 4 billion euros ($5.4 billion) by 2012. So it decided to start buying parts together with its German rival Daimler. At the beginning, both sides had to develop a certain kind of trust, but the cultural thing was not a big issue. BMW and Daimler were on the same page in terms of quality, standardizing parts to meet both companies’ design requirements was a challenge. BMW and Daimler both have unique proportions. By purchasing just a few dozen parts together in bulk, Daimler and BMW have been able to cut material costs by over 100 million euros per year.

    • Fading Exclusivity
    BMW and Daimler could probably save much more if they expanded their common catalogue but it turns out they’re quite picky about which parts they share. Neither manufacturer wants to jeopardize their technical secrets or their brand’s image. For instance, BMW and Dalmar develop and purchase components jointly that does not help to distinguish between the two brands. Almost everything the customer can see is off limits. So whilst they’re prepared to source the same parts for a seat’s interior, the exterior upholstery remains exclusive to each brand.

    Airline Industry
    According to Brueckner (2007), airline industry enters into cooperation for the following reasons:

    • Achieve a better network
    Air carriers enter into cooperative arrangements for a variety of reasons, and the details of those arrangements vary widely depending upon the markets in which, and the partners with whom, they cooperate. For example, carriers may want to achieve a better network reach (and thus generate additional revenue), seek to minimise risk exposure, and share in the risks of launching new routes or creating information technology projects. A cooperation can be generally characterised as taking the form of either a “tactical” or a “strategic” alliance.

    • Address a specific deficiency in their networks
    Carriers may form tactical alliances to address a specific deficiency in their networks. Tactical alliance agreements typically involve only two carriers and cover a limited number of routes, with the principal objective of providing connectivity to each carrier’s respective networks. Examples of tactical alliances include Virgin Atlantic / Continental (a code-sharing arrangement), American / JetBlue (an interline and frequent flyer programme) and Air France (a code-sharing arrangement).

    • Coordinate on a multilateral basis
    Members of the global alliances coordinate on a multilateral basis to create the largest possible worldwide joint network. The global alliance model generally applies to the entirety of member airlines’ networks and offers a much wider scope for revenue synergies. While a “basic” level of cooperation is required by members of a global alliance – generally involving standard code-share agreements. Some alliance members seek higher levels of cooperation to enhance the benefits of the alliance. A standard code-share agreement allows for certain seats on a flight operated by one carrier also to be marketed by another carrier under its two-letter designator code.

    • Reduced competition
    Although alliance members cooperate on many aspects of the customer experience, they may nonetheless remain competitors, as the level of integration between and among the members of the alliance varies greatly. Thus, the trend towards joining a global alliance may not necessarily represent consolidation or reduced competition in the aviation industry. Instead, the competition analysis should distinguish between the degree of integration within the existing global alliances and the likely competitive effects. The analysis is similar regardless of whether the alliance is more tactical or strategic in nature.

    Food Industry
    According to Smith (2012) the following are the reasons why the food industry enters into cooperation’s:

    • Leveraging a strong brand by distributing products in a new market.
    McCormick & Company, Inc., a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavours, and Kohinoor Foods Ltd., India, one of the leading manufacturers and marketers of Basmati rice, worked together to market and sell basmati rice and other food products in India. The joint venture was intended to leverage McCormick’s broad product line with Kohinoor’s specific extensive distribution network in the Indian retail market.

    • Taking advantage of foreign manufacturing capabilities and efficiencies.
    Using economies of scale and efficiencies through foreign manufacturing in the food industry is hardly a new trend. As early as 1984, H.J. Heinz Company set up joint venture enterprises in Guangdong, China with the Yantang Company to produce baby cereals for export.

    • Combining purchasing power to source and purchase of raw materials.
    In recent years, some of the largest U. S. and international food chains, food service companies and private label distributors have formed international buying consortia to purchase imported private label food products for the account of their members or partners.

    • Using and sharing excess manufacturing capacity.
    In October (2010), Jack Link’s Beefy Jerky, the number one meat snack in the United States and fastest growing meat snack manufacturer worldwide, announced working with JBS, S.A., the world’s largest protein producer, to jointly produce beef jerky in two previously underutilized plants owned by JBS in São Paulo, Brazil.

    • Monetizing a break-through in manufacturing technology to provide an advantage to owners of relevant recipes.
    In 2005, food production giant Archer Daniels Midland Company (ADM) and Matsutani Chemical Industry Co., a Japanese producer of specialty food starches and maltodextrins entered into a partnership to produce, sell and market the dietary soluble fibre Fibersol-2. The food ingredient was originally developed by Matsutani. This leveraged ADM’s global presence for the production, sales and distribution functions.

    • Using a robust research department to further develop a product first developed by a potential partner.
    Country Life Vitamins, a family owned, New York-based nutritional products manufacturer, formed a cooperation agreement with Kikkoman, a large Japanese based multinational food conglomerate that manufactures food products, including soy sauce; food seasoning and flavouring; mirin; shōchū; and sake, juice and other beverages; pharmaceuticals; and restaurant management services. The main was to achieve sales growth to Country Life’s network of U.S. based health food stores by using Kikkoman’s research and development capabilities.

    5. Identify three joint ventures that have worked especially well in the past.
    According to Wallace (2004), “a joint venture is the coming together of two (or more) independent businesses for the sole purpose of achieving a specific outcome that would not have been achievable by any one of the firms alone”.
    The three joint ventures that worked well in the past are explained below:

    • The Dow Corning Joint Venture
    The Dow Chemical Company is one of the top three chemical manufacturers in the world, while Corning, Incorporated is a famous American manufacturer of glass. In 1942, a problem faced by the airlines brought two companies them closer in an effort to solve the problem. The presence of moisture and the Corona discharge was an obstacle for the aircrafts to fly at higher altitudes. The corona discharge also caused the production of hazardous products like ozone. In 1943, both companies formed an equally owned joint venture named Dow Corning. The joint venture company is headquartered in Midland, Michigan, USA. It specializes in silicone and silicon-based technology, and is the largest silicone product producer in the world (Source: http://infomory.com/famous/famous-joint-venture-companies/).

    • Sony Ericson (“Corporate Culture in an International Joint Venture”, A case study of Sony Ericsson by Ahmed and Pang, 2009)
    Sony Ericsson, which is an international joint venture between Swedish telecom giant “Ericsson” and Japanese consumer electronics manufacturer “Sony”. Sony Ericsson was established in 2001 as a 50/50 joint venture between Sony and Ericsson. These two companies joined hands together to introduce a new and innovative range of cellular phones in the global market by exploiting each other’s expertise and competencies in the design and technological fields (Career, 2009).

    • Siemens AG and Nokia Corp Joint Venture
    In 2006, Siemens AG of Germany and Nokia Corp of Finland formed a joint venture called Nokia Siemens Networks U.S. It is headquartered in Espoo, Greater Helsinki, Finland. The formation of this joint venture was prompted by the mergers in the industry like that of Alcatel with Lucent. Its need also arose due to the rising tendency in the low-cost Chinese manufacturers like Huawei Technologies Co. Ltd. The joint venture was formally announced on June 19, 2006, and it was officially launched in February, 2007 in Barcelona at the 3GSM World Congress. The company started operating fully on April 1, 2007 and has continuously operated since then in 150 countries. In 2011, the company was rated by measure of revenues as the fourth largest manufacturer of telecom equipment (http:infomory.com/famous/famous-joint-venture-companies).

    5. List four important reasons why many mergers and acquisitions fail.
    • Difficulty in cultural integration
    • Overstated Synergies
    • Regulatory Issues
    • Poor Business Fit

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
    • Related diversification for Google
    Google may introduce a live video calling application on google, whereby people with google mails can video call each other.
    • Unrelated diversification for Google
    Google may start a clothing line and use the opportunity of online sales and marketing to its existing customers.

    7. When would market development generally be the preferred strategy over backward or forward integration?
    • Product Failure (Extension of product life cycle)
    When the company wants to reduce the risk of product failure market development is preferred. For instance, when a product reaches maturity, market development is necessary in order to increase sales rather than integrating with another company.
    • Sole Control
    Backward and forward integration involve the integration of two or more businesses hence there can be conflict of interest however with market development, the business will remain the sole controller of its operations hence it would be preferred.
    • Less Investment
    Both backward and forward integration require high investment to generate a commensurate return however market development does not require such investments.
    • Cost effective
    Market development focuses on selling the same product to a newer, expanding customer base or entering new markets with the same base hence it is not very costly as compared to backward or forward integration which is expensive in that companies must invest a great deal of capital to set up or buy factories.
    • Focus
    Market development a company may have one CEO who focuses on the matter of finding the best ways to attract customers with the same products in order to have new customer base and increase revenue. Unlike with backward or forward integration, if for instance the company runs a successful retail business it requires a different set of skills than running a factory hence it is difficult to find a CEO that is good running both businesses.

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.

    Microsoft Acquired LinkedIn in June (2016)
    Microsoft bought one of the world’s most influential, specialised, highly read, constantly-updated digital media companies. The acquisition was popular in that Linkedin could be embedded with Skype, an email system and other enterprise products so that it could be able to recreate the connective tissue for enterprises.

    Facebook buys WhatsApp in October 2014
    The social media company expanded its messaging capabilities with this purchase. WhatsApp has very low costs, so it should eventually be wildly profitable this is a reason why it is popularly used by customers of all walks of life.

    Oracle acquired AddThis in January 2016
    AddThis is a social bookmarking start-up that allows website owners to add social media sharing widgets, with users bookmarking their content using third-party services such as Facebook, Twitter, and Pinterest. The acquisition was popular because AddThis expanded its services to provide publishers with information about the types of interest their readers had demonstrated on the other sites they visit.

    Google acquired AppBridge in March 2016
    AppBridge is a company that specializes in helping businesses move their files and data into the Google Cloud platform. The acquisition of AppBridge is becoming popular because it is enabling enterprises to move their files to its clouding services to protect data base files.

    References
    Ahmed, A & Pang, Z. (2009).Corporate Culture in an International Joint Venture: A case study of Sony Ericsson.
    Brueckner (2007); “An Empirical Analysis of Global Airline Alliances: Cases in North Atlantic Markets.” Review of Industrial Organization, Vol. 16 (2000), pp. 367-383.
    Culpan, R. (2002). Global Business Alliances: Theory and Practice. Greenwood Publishing Group.
    Rugman, A & Collinson, S. (2012): International Business, 6th Edition McGraw-Hill, Inc. London.
    Smith, A. (2012). A Freeborn & Peters Food Industry Team White Paper.
    Wallace, R. (2004). Strategic Partnerships: An Entrepreneur’s Guide to Joint Ventures and
    Alliances, Dearborn Trade, A Kaplan Professional Company.
    Yan, A. & Luo, Y. (2000). International Joint Ventures: Theory and Practice. M. E. Sharpe. http://infomory.com/famous/famous-joint-venture-companies/
    http://www.dw.com/en/cooperation-is-the-key-to-success-in-the-auto-sector

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  16. Name: PATRICK KABIKA MWILA KABWE
    Student number: 20168041
    Department: M. Sc. INNOVATION AND KNOWLEDGE MANAGEMENT

    1.
    a. One of the objectives of Africa Food Project in 2016 was to promote forward integration model as that project was an innovate partnership between Sahara Group, the United Nations’ SDG Fund, FAO, ILO, ITC, IFAD the Roca Brothers and the Kaduna State Government to achieve Sustainable Development Goals.
    b. Pepsi purchased its bottlers for better control over
    the distribution of its growing product offerings (Collier 2009).
    Forward integration extends a manufacturer’s operational reach to product retailing, tightening
    its grip on the demand side.
    c. European fashion giant Zara and Los Angeles-based
    apparel retailer American Apparel manufacture products and sell them through their own retail
    channels.
    d. Similarly, Tainan Enterprise, a Taiwan-based manufacturer, established its own brand, Tony Wear,in China in the late 1990’s (Ho 2002).
    e. Roos et al. (2002) report a combination of value added and forward integration strategies of the Swedish sawmilling industry, and that significant differences in terms of value added and profitability between a cluster of large forest company sawmills (at the specific sawmill level) and a cluster of buying sawmill companies were established , p9

    2.
    a. Email Marketing
    The beauty of Uber’s emails is in their simplicity. They let their email subscribers know about deals and promotions by sending an email like the one you see below. We love how brief the initial description is, paired with a very clear call-to-action — which is perfect for subscribers who are quickly skimming the email. For the people who want to learn more, these are followed by a more detailed (but still pleasingly simple), step-by-step explanation of how the deal works.
    b. Publishing a Blog
    Blogger is possibly the oldest blogging platform still actively running on the web, Google Blogger has been home to millions of bloggers for over 16 years now, and still maintains a quite stable market share in the content management platform list.
    c. Surveying, Listening, Learning
    Customer satisfaction is at the core of human experience, reflecting our liking of a company’s business activities. High levels of customer satisfaction (with pleasurable experiences) are strong predictors of customer retention, customer loyalty, and product repurchase.. Offer a discount to email subscribers who complete a survey, or have printed surveys and pens on hand at a store, have a customer complete a survey on her phone or tablet to get a discount before purchasing. The feedback is great in two part; it can inform on your business’ best practices and result in some handy testimonials, and highlight the areas that need improvement.
    Kaseya Customer Survey Example:
    Kaseya are using SurveyMonkey to facilitate their customer satisfaction survey. Initial impressions are the survey is nice looking, includes the companies branding and is reasonably clear.

    3.
    a. MICROSOFT+TOYOTA
    In April 2011 Microsoft Corporation and Toyota Mo¬tor Corp. launched a strategic alliance to jointly fab¬ricate a software platform dedicated to managing the information systems for electric vehicles.
    The initiative was invaluable for the new generation of telematics services, which included energy manage¬ment, GPS systems and multimedia technologies.
    The first fruits of this collaboration has seen in Toyota vehicles in 2012.
    The companies’ objective was to create, by 2015, a complete platform in the cloud that could provide telematics systems to every Toyota customer in the world.
    As part of the collaboration, the two companies each invested $12 million in Toyota Media Service Co., a subsidiary that developed digital information ser¬vices for Toyota customers.
    b. COCA-COLA + HEINZ
    In 2009, The Coca-Cola Company created the Plant¬BottleTM, a plastic (PET) bottle partially manufactured (30%) with plant-derived materials (like sugar cane and molasses) and byproducts of sugar production in Brazil. These plants were chosen based on envi¬ronmental criteria to ensure that they do not interfere with local crops. The remaining 70% of each bottle is made with materials derived from fossil fuels, such as petroleum.
    c. AIRBNB + VAYABLE:
    The two platforms have decided to collaborate, to jointly offer their services through a unified business model based on selling sensations and unique expe¬riences that go far beyond traditional tourist services. As with any social platform, the prestige of each ser¬vice is generated by the online comments and rec¬ommendations of its users.

    4.
    a. Siemens AG and Nokia Corp Joint Venture
    In 2006, Siemens AG of Germany and Nokia Corp of Finland formed a joint venture called Nokia Siemens Networks U.S. It is headquartered in Espoo, Greater Helsinki, Finland. The formation of this joint venture was prompted by the mergers in the industry like that of Alcatel with Lucent. Its need also arose due to the rising tendency in the low-cost Chinese manufacturers like Huawei Technologies Co. Ltd. The joint venture was formally announced on June 19, 2006, and it was officially launched in February, 2007 in Barcelona at the 3GSM World Congress. The company started operating fully on April 1, 2007 and has continuously operated since then in 150 countries. In 2011, the company was rated by measure of revenues as the fourth largest manufacturer of telecom equipment. In this respect, it is next only to Ericsson, Huawei, and Alcatel Lucent.
    b. Microsoft and GE Joint Venture, Caradigm
    In December, 2011, Microsoft Corporation and General Electric formed a joint venture which is a health IT company of its own kind. Their common objective was to improve patient experience and the economics of health and wellness through providing the health systems with required systemwide data and intelligence. The joint venture, known as Caradigm, aims at combining technology and clinical applications to transform it into intelligence which is usable by care providers. The name Caradigm evolved from ‘care’ and ‘paradigm,’ because Microsoft and GE intended a paradigm shift in the care delivery system.
    c. Sony-Ericsson
    Sony-Ericsson is a joint venture between Sony and the Swedish company Ericsson. Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company. Ericsson used to get chips from Philips, but in March, 2000, a fire destroyed the production facility of Philips. Facing an acute shortage of chips, Ericsson was prompted to form a joint venture with Sony. On February 16, 2012, Sony acquired Ericsson’s share in the venture and renamed the company as Sony Mobile Communications. Sony Mobile shifted its headquarters from Lund, Sweden to Tokyo, Japan on January 7, 2013.

    5.
    a. No common vision: In the absence of a clear statement of what the merged company will stand for, how the organisation will operate, what it will feel like, and what will be different compared to how things are today, there is no point of the convergence on the horizon and the organisations will never blend.
    b. Poor communication: Messages too frequently lack relevance to their audience and often hover at the strategic level when what employees want to know is why the organisation is merging, why a merger is the best course action it could take, in what way the company will be better after the merger, how it will “feel”, how the merger will affect their work and what support they will receive if they are adversely impacted.
    c. Ignorance: While the parties to a merger or acquisition cannot exchange commercially sensitive information prior to being under common ownership, there is enough crucially important and legally permissible preparation work to keep an integration team busy for several months before day one. Most chief executives don’t know this and they waste the time that could be put to good use while they await clearance from the regulatory authorities. Good preparation means the integration can kick off on day one. Speed matters.
    d. Weak leadership: Integrating two organisations is like sailing through a storm: you need a strong captain, someone whom everyone can trust to bring the ship to its destination, someone who projects energy, enthusiasm, clarity, and who communicates that energy to everyone. If senior managers do not walk the talk, if their behaviours and ways of working do not match the vision and values the company aspires to, all credibility is lost and the merger’s mission is reduced to meaningless words.
    6.
    a. Since Google is in the information business, in 2014 it purchased Titan Aerospace, a maker of solar-powered drones, an example of related diversification. Some firms that engage in related diversification aim to develop and exploit a core competency to become more successful.
    b. Unrelated diversification involves entering an entirely new industry that lacks any important similarities with the firm’s existing industry or industries, and is often accomplished through a merger or acquisition. The two best examples of this are Glass and self-driving cars.

    7. Market development over backward integration can involve a purchase of suppliers in order to reduce supplier dependency with regard to e.g. timely deliveries, quality concerns, innovation ability etc.
    On the other hand market development over Forward integration
    might be required, if companies would potentially benefit from handling e.g. the shipping of own products directly to customers, or the retail selling of own brands in brand stores.

    8.
    a. Oracle and NetSuite
    b. Verizon and Yahoo
    c. ARM and SoftBank
    d. OpenText buying Dell’s enterprise content division
    Mergers and acquisitions take place for many strategic business reasons, but the most common reasons for any business combination are economic at their core. Following are some of the various economic reasons:
    – Increasing capabilities: Increased capabilities may come from expanded research and development opportunities or more robust manufacturing operations (or any range of core competencies a company wants to increase).
    – Gaining a competitive advantage or larger market share: Companies may decide to merge into order to gain a better distribution or marketing network. A company may want to expand into different markets where a similar company is already operating rather than start from ground zero, and so the company may just merge with the other company.
    – Diversifying products or services: Another reason for merging companies is to complement a current product or service. Two firms may be able to combine their products or services to gain a competitive edge over others in the marketplace. For example, in 2008, HP bought EDS to strengthen the services side of their technology offerings (this deal was valued at about US$13.9 billion).
    – Replacing leadership: In a private company, the company may need to merge or be acquired if the current owners can’t identify someone within the company to succeed them. The owners may also wish to cash out to invest their money in something else, such as retirement!
    – Cutting costs: When two companies have similar products or services, combining can create a large opportunity to reduce costs. When companies merge, frequently they have an opportunity to combine locations or reduce operating costs by integrating and streamlining support functions.
    – Surviving: It’s never easy for a company to willingly give up its identity to another company, but sometimes it is the only option in order for the company to survive. A number of companies used mergers and acquisitions to grow and survive during the global financial crisis from 2008 to 2012.
    During the financial crisis, many banks merged in order to deleverage failing balance sheets that otherwise may have put them out of business.
    Mergers and acquisitions occur for other reasons, too, but these are some of the most common. Frequently, companies have multiple reasons for combining.

    References

    An innovate partnership between Sahara Group, the United Nations’ SDG Fund, FAO, ILO, ITC, IFAD the Roca Brothers and the Kaduna State Government, New York, 2016, pp4

    Yen-Ting Lin & , Vertical Integration under Competition: Forward,
    Backward, or No Integration? Forthcoming in Production and Operations Management, pp11

    Linköping University Post Print, Value-added strategies and forward integration in the Swedish sawmill industry: positioning and profitability in the high-volume segment, pp6

    https://www.qualtrics.com/blog/customer-satisfaction-survey-questions/

    http://www.wordstream.com/blog/ws/2016/06/23/small-business-strategies
    http://infomory.com/famous/famous-joint-venture-companies/

    https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/stevefaktor/2013/05/23/featuredeconstructing-googlersquos-strategy-will-google-eat-your-business-next/&refURL=https://www.google.com.cy/&referrer=https://www.google.com.cy/

    http://www.dummies.com/business/corporate-finance/mergers-and-acquisitions/the-reasons-for-mergers-and-acquisitions/

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  17. (1). Five situations when forward integration is a particularly good strategy according to
    i. High resource disposal such as more human capital and financial resources
    ii. Effectiveness and efficiency in distributing the product (low transaction costs, high reliability etc.)
    iii. High current such as high profit levels, return on equity, return on assets etc
    iiii. Future performance such as high profit levels, return on equity, return on assets etc
    v. When costs are falling implying more profits

    (2). Three strategies defined do you feel are most widely used by small businesses are;
    i. Specialization and Target marketing focusing on a particulat product like shoes for women or focusing on men’s wear.
    ii. Product development introducing a new product to existing customers or markets such as offering movie cinemas by Lemar
    iii. Market development- venturing into markets, movie and clothing markets by Lemar

    (3). List three industries where cooperation among competitors is most likely and explain why.
    Tourism industries in which initiatives are so common and can be either to promote a particular destination or service in which later on all players will get to benefit from the influx of more tourists (Coutler, 1998). Cooperation is highly in situations which the main purpose of most firms is reap huge market rewards in the form of profits and this is common in the agricultural industries. The other case is when competition is expected to yield adverse effects and such firms are forced to cooperate (Cooper, 1981). A notable example can be pointed to software and technology industries in which patents may make it difficult to engage in competition especially when knowing that other competitors have more patent rights.

    4. Identify three joint ventures that have worked especially well in the past.
    I. Sony and Ericsson’s Joint Venture
    II. EMC Global and CISCO
    III. Jaguar land Rovers and Cherry Automobile

    5. List four important reasons why many mergers and acquisitions fail.
    I. Inadequate due diligence which encompasses failure to accurately estimate risks (Wolfe, 1997)
    II. Integration difficulties posed by the changed operating environment
    III. Poor strategic fit (Wheelen, 2012)
    IIII. Geographical constraints

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
​
    I. Related diversification – search and display advertising.
    II. Unrelated diversification – google shopping express

    7. When would market development generally be the preferred strategy over backward or forward integration?
    I. High tendency to succeed
    II. Gain more customers or market share
    III. Costs are falling (Mahooney & Pandian, 1992)
    IIII. Risk levels are low
    V. More profits can be made (Glueck, 1980)

    8. 4 examples of technology acquisitions in the past 2 years are;.
    I. Facebook acquiring WhatsApp
    II. Google acquiring Motorola Mobility
    III. Oracle acquiring PeopleSoft
    IIII. HP acquiring Autonomy

    ❖ This strategy is now popular because business entities have managed to succeed by lowering competitive threats which caused them to gain a huge market base. In most cases, it has led to reduced risks of failure and is often regarded as a diversification strategy.

    REFERENCES
    1. Cooper, A. C. (1981). Strategic management: New ventures and small business. Long range planning, 14(5), 39-45.
    2. Coulter, M. K. (1998). Strategic management in action. Prentice Hall.
    3. Digman, L. A. (1990). Strategic management: Concepts, decisions, cases. Business Pubns.
    4. Glueck, W. F. (1980). Strategic management and business policy. McGraw-Hill.
    5. Mahoney, J. T., & Pandian, J. R. (1992). The resource‐based view within the conversation of strategic management. Strategic management journal, 13(5), 363-380.
    6. Wheelen, T. L. (2012). Concepts in Strategic Management and Business Policy: Toward Global Sustainability Plus New…… Prentice Hall.
    7. Wolfe, J. (1997). The effectiveness of business games in strategic management course work. Simulation & Gaming, 28(4), 360-376.

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  18. NAME: PATRICK KABIKA MWILA KABWE
    STUDENT NUMBER: 20138041
    DEPARTMENT: M. Sc. INNOVATION AND KNOWLEDGE MANAGEMENT

    1.
    a. One of the objectives of Africa Food Project in 2016 was to promote forward integration model as that project was an innovate partnership between Sahara Group, the United Nations’ SDG Fund, FAO, ILO, ITC, IFAD the Roca Brothers and the Kaduna State Government to achieve Sustainable Development Goals.
    b. Pepsi purchased its bottlers for better control over
    the distribution of its growing product offerings (Collier 2009).
    Forward integration extends a manufacturer’s operational reach to product retailing, tightening
    its grip on the demand side.
    c. European fashion giant Zara and Los Angeles-based
    apparel retailer American Apparel manufacture products and sell them through their own retail
    channels.
    d. Similarly, Tainan Enterprise, a Taiwan-based manufacturer, established its own brand, Tony Wear,in China in the late 1990’s (Ho 2002).
    e. Roos et al. (2002) report a combination of value added and forward integration strategies of the Swedish sawmilling industry, and that significant differences in terms of value added and profitability between a cluster of large forest company sawmills (at the specific sawmill level) and a cluster of buying sawmill companies were established , p9

    2.
    a. Email Marketing
    The beauty of Uber’s emails is in their simplicity. They let their email subscribers know about deals and promotions by sending an email like the one you see below. We love how brief the initial description is, paired with a very clear call-to-action — which is perfect for subscribers who are quickly skimming the email. For the people who want to learn more, these are followed by a more detailed (but still pleasingly simple), step-by-step explanation of how the deal works.
    b. Publishing a Blog
    Blogger is possibly the oldest blogging platform still actively running on the web, Google Blogger has been home to millions of bloggers for over 16 years now, and still maintains a quite stable market share in the content management platform list.
    c. Surveying, Listening, Learning
    Customer satisfaction is at the core of human experience, reflecting our liking of a company’s business activities. High levels of customer satisfaction (with pleasurable experiences) are strong predictors of customer retention, customer loyalty, and product repurchase.. Offer a discount to email subscribers who complete a survey, or have printed surveys and pens on hand at a store, have a customer complete a survey on her phone or tablet to get a discount before purchasing. The feedback is great in two part; it can inform on your business’ best practices and result in some handy testimonials, and highlight the areas that need improvement.
    Kaseya Customer Survey Example:
    Kaseya are using SurveyMonkey to facilitate their customer satisfaction survey. Initial impressions are the survey is nice looking, includes the companies branding and is reasonably clear.

    3.
    a. MICROSOFT+TOYOTA
    In April 2011 Microsoft Corporation and Toyota Mo¬tor Corp. launched a strategic alliance to jointly fab¬ricate a software platform dedicated to managing the information systems for electric vehicles.
    The initiative was invaluable for the new generation of telematics services, which included energy manage¬ment, GPS systems and multimedia technologies.
    The first fruits of this collaboration has seen in Toyota vehicles in 2012.
    The companies’ objective was to create, by 2015, a complete platform in the cloud that could provide telematics systems to every Toyota customer in the world.
    As part of the collaboration, the two companies each invested $12 million in Toyota Media Service Co., a subsidiary that developed digital information ser¬vices for Toyota customers.
    b. COCA-COLA + HEINZ
    In 2009, The Coca-Cola Company created the Plant¬BottleTM, a plastic (PET) bottle partially manufactured (30%) with plant-derived materials (like sugar cane and molasses) and byproducts of sugar production in Brazil. These plants were chosen based on envi¬ronmental criteria to ensure that they do not interfere with local crops. The remaining 70% of each bottle is made with materials derived from fossil fuels, such as petroleum.
    c. AIRBNB + VAYABLE:
    The two platforms have decided to collaborate, to jointly offer their services through a unified business model based on selling sensations and unique expe¬riences that go far beyond traditional tourist services. As with any social platform, the prestige of each ser¬vice is generated by the online comments and rec¬ommendations of its users.

    4.
    a. Siemens AG and Nokia Corp Joint Venture
    In 2006, Siemens AG of Germany and Nokia Corp of Finland formed a joint venture called Nokia Siemens Networks U.S. It is headquartered in Espoo, Greater Helsinki, Finland. The formation of this joint venture was prompted by the mergers in the industry like that of Alcatel with Lucent. Its need also arose due to the rising tendency in the low-cost Chinese manufacturers like Huawei Technologies Co. Ltd. The joint venture was formally announced on June 19, 2006, and it was officially launched in February, 2007 in Barcelona at the 3GSM World Congress. The company started operating fully on April 1, 2007 and has continuously operated since then in 150 countries. In 2011, the company was rated by measure of revenues as the fourth largest manufacturer of telecom equipment. In this respect, it is next only to Ericsson, Huawei, and Alcatel Lucent.
    b. Microsoft and GE Joint Venture, Caradigm
    In December, 2011, Microsoft Corporation and General Electric formed a joint venture which is a health IT company of its own kind. Their common objective was to improve patient experience and the economics of health and wellness through providing the health systems with required systemwide data and intelligence. The joint venture, known as Caradigm, aims at combining technology and clinical applications to transform it into intelligence which is usable by care providers. The name Caradigm evolved from ‘care’ and ‘paradigm,’ because Microsoft and GE intended a paradigm shift in the care delivery system.
    c. Sony-Ericsson
    Sony-Ericsson is a joint venture between Sony and the Swedish company Ericsson. Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company. Ericsson used to get chips from Philips, but in March, 2000, a fire destroyed the production facility of Philips. Facing an acute shortage of chips, Ericsson was prompted to form a joint venture with Sony. On February 16, 2012, Sony acquired Ericsson’s share in the venture and renamed the company as Sony Mobile Communications. Sony Mobile shifted its headquarters from Lund, Sweden to Tokyo, Japan on January 7, 2013.

    5.
    a. No common vision: In the absence of a clear statement of what the merged company will stand for, how the organization will operate, what it will feel like, and what will be different compared to how things are today, there is no point of the convergence on the horizon and the organizations will never blend.

    b. Poor communication: Messages too frequently lack relevance to their audience and often hover at the strategic level when what employees want to know is why the organisation is merging, why a merger is the best course action it could take, in what way the company will be better after the merger, how it will “feel”, how the merger will affect their work and what support they will receive if they are adversely impacted.
    Ignorance: While the parties to a merger or acquisition cannot exchange commercially sensitive information prior to being under common ownership, there is enough crucially important and legally permissible preparation work to keep an integration team busy for several months before day one. Most chief executives don’t know this and they waste the time that could be put to good use while they await clearance from the regulatory authorities. Good preparation means the integration can kick off on day one. Speed matters.
    Weak leadership: Integrating two organisations is like sailing through a storm: you need a strong captain, someone whom everyone can trust to bring the ship to its destination, someone who projects energy, enthusiasm, clarity, and who communicates that energy to everyone. If senior managers do not walk the talk, if their behaviours and ways of working do not match the vision and values the company aspires to, all credibility is lost and the merger’s mission is reduced to meaningless words.

    6.
    a. Since Google is in the information business, in 2014 it purchased Titan Aerospace, a maker of solar-powered drones, an example of related diversification. Some firms that engage in related diversification aim to develop and exploit a core competency[3] to become more successful.
    b. Unrelated diversification involves entering an entirely new industry that lacks any important similarities with the firm’s existing industry or industries, and is often accomplished through a merger or acquisition. The two best examples of this are Glass and self-driving cars.
    7.
    Market development would be preferred over Backward integration if this could involve a purchase of suppliers in order to reduce supplier dependency with regard to e.g. timely deliveries, quality concerns, innovation ability etc.
    On the other hand, it might be required over forward integration if companies would potentially benefit from handling e.g. the shipping of own products directly to customers, or the retail selling of own brands in brand stores.
    8.
    1. Tech acquisitions have taken place in recent weeks, with OpenText buying Dell’s enterprise content division, HP grabbing Samsung’s printer business, SoftBank snapping up Cambridge-based chipmakers ARM and Verizon agreeing to buy Yahoo Inc for $4.8 billion (£3.6 billion), not to mention Oracle’s latest acquisition of NetSuite. In fact, 2016 has been packed full of major tech acquisitions. We’ve listed some of the most notable corporate takeovers to occur in 2016.

    2. Here are some reasons why this strategy is now popular:

    Increasing capabilities: Increased capabilities may come from expanded research and development opportunities or more robust manufacturing operations (or any range of core competencies a company wants to increase). Similarly, companies may want to combine to leverage costly manufacturing operations (as was the hoped for case in the acquisition of Volvo by Ford).

    Gaining a competitive advantage or larger market share: Companies may decide to merge into order to gain a better distribution or marketing network. A company may want to expand into different markets where a similar company is already operating rather than start from ground zero, and so the company may just merge with the other company.

    Diversifying products or services: Another reason for merging companies is to complement a current product or service. Two firms may be able to combine their products or services to gain a competitive edge over others in the marketplace. For example, in 2008, HP bought EDS to strengthen the services side of their technology offerings (this deal was valued at about US$13.9 billion).

    Cutting costs: When two companies have similar products or services, combining can create a large opportunity to reduce costs. When companies merge, frequently they have an opportunity to combine locations or reduce operating costs by integrating and streamlining support functions.

    References:

    An innovate partnership between Sahara Group, the United Nations’ SDG Fund, FAO, ILO, ITC, IFAD the Roca Brothers and the Kaduna State Government, New York, 2016

    Yen-Ting Lin, Vertical Integration under Competition: Forward,
    Backward, or No Integration? Forthcoming in Production and Operations Management

    Linköping University Post Print, Value-added strategies and forward integration in the Swedish sawmill industry: positioning and profitability in the high-volume segment

    https://www.qualtrics.com/blog/customer-satisfaction-survey-questions/

    http://www.wordstream.com/blog/ws/2016/06/23/small-business-strategies
    http://infomory.com/famous/famous-joint-venture-companies/

    https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/stevefaktor/2013/05/23/featuredeconstructing-googlersquos-strategy-will-google-eat-your-business-next/&refURL=https://www.google.com.cy/&referrer=https://www.google.com.cy/

    https://neustrategicmanagement.wordpress.com/

    http://www.dummies.com/business/corporate-finance/mergers-and-acquisitions/the-reasons-for-mergers-and-acquisitions/

    http://www.computerworlduk.com/galleries/it-business/-of-most-notable-tech-acquisitions-of-2016-3643977/

    Like

  19. Assignment 2:
    Name: Luckie Musyimi
    No: 20168028
    Department: MBA

    1. Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with examples.

     When an organization competes in an industry that is growing.
     When the availability of quality distributors is so limited as to offer a competitive advantage.
     When the advantages of stable production are high.
     When an organizations present distributors are especially expensive.
     When present distributors or retailers have high profit margins.

    The goal of forward integration is for a company to move forward in the supply chain, increasing its overall ownership of the industry. For example, the company Intel supplies Del with intermediate goods – its processors – that are placed within Del’s hardware. If Intel wanted to move forward in the supply chain, it could conduct a merger or acquisition of Del in order to own the manufacturing portion of the industry.

    5. List four important reasons why many mergers and acquisitions fail.
     Integration difficulty.
     Reduced employee morale due to layoffs and relocations.
     Too much diversification.
     Managers overly focused on acquisitions.

    4. Identify three joint ventures that have worked especially well in the past.
     The 2008 joint venture launched by NBC Universal Television Group (Comcast), Fox Broadcasting Company (21st Century Fox), and Disney-ABC Television Group (The Walt Disney Company) to create the enormously popular video streaming website “Hulu” is one example of a large scale partnering of companies that has been very profitable.
     Kellogg Company entered into a joint venture agreement with Wilmar International Limited for the purpose of selling and distributing cereal and snack foods to consumers in China. While Kellogg brings to the table an extensive collection of globally renowned products as well as their expertise in the industry, Wilmar offers marketing and sales infrastructure in China, including an extensive distribution network and supply chain.
     In December, 2011, Microsoft Corporation and General Electric formed a joint venture which is a health IT Company of its own kind. Their common objective was to improve patient experience and the economics of health and wellness through providing the health systems with required system wide data and intelligence.
    7. When would market development generally be the preferred strategy over backward or forward integration?
     When introducing present product and services to a new geographic area, expanding the potential market through new users or new uses and expanding sales through new uses for the product.
    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
     An example of unrelated diversification is Google deciding to go into the food and drinks industry. E.g. provide consumers with a type of energy drink.
     An example of related diversification is Google comes up with a product that enables celebrities to share their experiences anonymously.

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
     In February 22, 2016, Ravello systems acquired virtualization technology, enabling applications to run on different hypervisors without transformations.
     In September 18, 2016, Palerra acquired Cloud computing security.
     In December 18, 2015, StackEngine acquired Software for managing applications built on the open source Docker platform.
     In August 20, 2015, Maxymiser acquired leading provider of cloud-based software that enables marketers to test, target and personalize what a customer sees on a Web page or app.

    This strategy is now popular because there are more buyers and the sheer numbers of possible transactions make an acquisition more likely. Selling a company is cheaper and faster and provides a specific return for the investors at a price they have some control in determining.

    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
     Market Development strategy- introducing present product or services into a new geographic area. E.g. A catalog retailer could buy a third-party mailing list targeting new customer types to develop beyond its existing customer mailing list.
     Forward Integration- gaining ownership or increased control over distributors or retailers. E.g. a small manufacturing business (Many small handcrafted or customized product businesses take customer orders online and either ship immediately, or make goods to match the customer’s parameters without going through wholesalers and retailers.)
     Product development- seeking increased sales by improving present products or services or developing new ones. E.g. a small seasoning business could come up with better types of seasonings and spices than those that exist by growing its own vegetables.
    3. List three industries where cooperation among competitors is most likely and explain why.
     The technology industry- Start-ups that enjoy venture backing may reap the benefits of ultimately lower transaction costs associated with a negotiated deal. As a result, the company may find that cooperating with a competitor, or directly selling its technology to a competitor, can provide it and its investors with a higher return on investment.
     The biotechnology industry- sunk cost requirements make it expensive for start-ups to enter alone. This situation makes leveraging the assets and resources of an established firm a more viable option. The study showed that start-ups have pursued cooperation strategies more often when sunk costs in their industries are high, which reflects the higher value of such strategies in these situations.
     The service industry (innovation) – start-ups can earn higher returns by acting as an upstream supplier of innovation rather than as a horizontal innovation-oriented competitor. In other words, by participating in the market for ideas rather than in the market for products, new companies can make the best use of their innovations.

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  20. (1). Foremost, it is good to integrate when the level of market competition in which the firm wants to engage in is considered to be unsaturated (Schot & Geels, 2008). That is, the market is not largely condensed with market players. Also when chances of the firm succeeding with forward integration are high, then forward integration is deemed to be a good strategy. In line with this features also stems the feature of distributing products in a cost effective and reliable manner. Above all is the firm’s capability to undertake forward integration. When firms are highly capable to undertake forward integration then, forward integration can be considered to be a good strategy (availability of resources). The other condition lies in the firm’s present performance levels. Highly performing firms can easily engage in forward integration as compared to lowly performing firms in which integration can be perceived as failure (Schot & Geels, 2008).

    2. Small firms are more likely to engage in product development (introducing a new product such as mobile money transfer, market development (targeting new markets for instance Telsim launching operations in South Cyprus) and market penetration by advertising or lowering their prices (sales discounts, promotional offers etc).

    3. Circumstance under which firms are more likely to cooperate are;
    • When wanting to make more profits,
    • When delivering a common service which might be of great benefit to a large number of people (Mauri & Michael, 1998),
    • To take advantages of other opportunities that being experienced by other firms and as such the pertains to the following industries;
    1. Oil industries
    2. Non-profit making industries
    3. Health care industries

    4. Identify three joint ventures that have worked especially well in the past.
    1. Verizon and Vodafon ​ 2. Pfizer and Hisun ​ 3. Gas, LLC and AMEC Samsung Oil

    5. List four important reasons why many mergers and acquisitions fail.
    • Incompatible systems and processes (Teece et al., 1990).
    • Top management failure (Schot & Geels, 2008).
    • Overestimated synergies (Schot & Geels, 2008).
    • Changes in the business environment and external factors (Teece et al., 1990).

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google. Respectively they are video advertising and broadband internet.
​
    7. When would market development generally be the preferred strategy over backward or forward integration?
    Market development is a good strategy when the risk weighed against other strategies are total high, that is market development has low associated risks. Also it allows corporations to obtain huge profit rewards. When compared with other strategies, market development it should be having a high degree of success against other strategies and should allow the business entity to gain a huge market share (Cravens & Piercy, 2006).

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    Skype acquired by Microsoft, Sun Microsystems acquired by Oracle, WhatsApp acquired by Facebook and HP acquiring Electronic Data Corp.

    This is famous because of the following reasons;
    – low competitive pressure
    – Expanded market base
    – Diversification
    – More profits.

    REFERENCES
    I. Cravens, D. W., & Piercy, N. (2006). Strategic marketing (Vol. 7). New York: McGraw-Hill.
    II. Mauri, A. J., & Michaels, M. P. (1998). Firm and industry effects within strategic management: An empirical examination. Strategic Management Journal, 211-219.
    III. Sanchez, R., Heene, A., & Thomas, H. (Eds.). (1996). Dynamics of competence-based competition: theory and practice in the new strategic management. Pergamon Pr.
    IIII. Schot, J., & Geels, F. W. (2008). Strategic niche management and sustainable innovation journeys: theory, findings, research agenda, and policy. Technology analysis & strategic management, 20(5), 537-554.
    V. Teece, D. J., Pisano, G. P., & Shuen, A. (1990). Firm capabilities, resources, and the concept of strategy: four paradigms of strategic management (pp. CCC-working). University of California at Berkeley, Center for Research in Management, Consortium on Competitiveness & Cooperation.
    VI. Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy. Pearson Education India.

    Like

  21. hustafa halgurd hamadameen
    20166408
    economic department

    201(1). Foremost, it is good to integrate when the level of market competition in which the firm wants to engage in is considered to be unsaturated (Schot & Geels, 2008). That is, the market is not largely condensed with market players. Also when chances of the firm succeeding with forward integration are high, then forward integration is deemed to be a good strategy. In line with this features also stems the feature of distributing products in a cost effective and reliable manner. Above all is the firm’s capability to undertake forward integration. When firms are highly capable to undertake forward integration then, forward integration can be considered to be a good strategy (availability of resources). The other condition lies in the firm’s present performance levels. Highly performing firms can easily engage in forward integration as compared to lowly performing firms in which integration can be perceived as failure (Schot & Geels, 2008).

    2. Small firms are more likely to engage in product development (introducing a new product such as mobile money transfer, market development (targeting new markets for instance Telsim launching operations in South Cyprus) and market penetration by advertising or lowering their prices (sales discounts, promotional offers etc).

    3. Circumstance under which firms are more likely to cooperate are;
    • When wanting to make more profits,
    • When delivering a common service which might be of great benefit to a large number of people (Mauri & Michael, 1998),
    • To take advantages of other opportunities that being experienced by other firms and as such the pertains to the following industries;
    1. Oil industries
    2. Non-profit making industries
    3. Health care industries

    4. Identify three joint ventures that have worked especially well in the past.
    1. Verizon and Vodafon ​ 2. Pfizer and Hisun ​ 3. Gas, LLC and AMEC Samsung Oil

    5. List four important reasons why many mergers and acquisitions fail.
    • Incompatible systems and processes (Teece et al., 1990).
    • Top management failure (Schot & Geels, 2008).
    • Overestimated synergies (Schot & Geels, 2008).
    • Changes in the business environment and external factors (Teece et al., 1990).

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google. Respectively they are video advertising and broadband internet.
​
    7. When would market development generally be the preferred strategy over backward or forward integration?
    Market development is a good strategy when the risk weighed against other strategies are total high, that is market development has low associated risks. Also it allows corporations to obtain huge profit rewards. When compared with other strategies, market development it should be having a high degree of success against other strategies and should allow the business entity to gain a huge market share (Cravens & Piercy, 2006).

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    Skype acquired by Microsoft, Sun Microsystems acquired by Oracle, WhatsApp acquired by Facebook and HP acquiring Electronic Data Corp.

    This is famous because of the following reasons;
    – low competitive pressure
    – Expanded market base
    – Diversification
    – More profits.

    REFERENCES
    I. Cravens, D. W., & Piercy, N. (2006). Strategic marketing (Vol. 7). New York: McGraw-Hill.
    II. Mauri, A. J., & Michaels, M. P. (1998). Firm and industry effects within strategic management: An empirical examination. Strategic Management Journal, 211-219.
    III. Sanchez, R., Heene, A., & Thomas, H. (Eds.). (1996). Dynamics of competence-based competition: theory and practice in the new strategic management. Pergamon Pr.
    IIII. Schot, J., & Geels, F. W. (2008). Strategic niche management and sustainable innovation journeys: theory, findings, research agenda, and policy. Technology analysis & strategic management, 20(5), 537-554.
    V. Teece, D. J., Pisano, G. P., & Shuen, A. (1990). Firm capabilities, resources, and the concept of strategy: four paradigms of strategic management (pp. CCC-working). University of California at Berkeley, Center for Research in Management, Consortium on Competitiveness & Cooperation.
    VI. Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy. Pearson Education India.66408

    Like

  22. Name: Lardmore Chitange
    Student Number: 20166916
    Department: Tourism and Hotel Management
    1. Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increase numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with examples.
    Forward integration is a form of management control that involves companies in the same supply chain belonging to one owner. In many cases, forward integration is actually a form of diversification from the company’s usual business.
    Merger and acquisitions is a form of forward integration whereby a company performs forward integration when it merges with or purchases an organization involved in the distribution of its products. When the organization has enough resources to acquire, maintain and manage expenses of distributing channels. For example, in February 2017, Hamilton Insurances in Zimbabwe acquired Cell Funeral Assurance Company. Cell Funeral offers a self –funded funeral service to organized groups and companies as well as conventional assurance plans and other associated services.
    Furthermore, forward integration can be identified when a company increased control over distributors for example Colcom Holding and FMCG. Colcom is a food processing company specializing in the rearing of livestock, processing and packaging of pork, beef and chicken meat products. FMCM and Foodservice Solutions Company, is a leading supplier to the hospitality and wholesale/retail industries in Zimbabwe. What makes Colcom more special is its vertical integration and association with the country’s largest FMCG distributor, Innscor Africa. Innscor Africa Limited engages in the manufacture, distribution and retail of fast moving and durable consumer goods in Zimbabwe and internationally.
    When integration create or exploit market power by raising barriers to entry or allowing price discrimination across customer segments. Wholesaler to consumer as a forward integration strategy. Wholesalers also can engage in forward integration by skipping the retail step and selling directly to consumer and business buyers. For example Mahomed Musa Wholesale in Zimbabwe is one of the largest wholesale to consumer business operations. A key quality of wholesalers that forward integrate is that they typically sell to both consumers and business buyers. Wholesalers normally offer bulk quantities or sizes that other small businesses buy and use. For instance, a restaurant might purchase a case of ketchup.
    When the organization has a high production capacity to meet the demand of customers. Manufacturer to consumer is also another situation where forward integration strategy can take place. Most internet and mobile technology have made direct to consumer selling much more feasible and common. For example, G-Tel in Zimbabwe provide customized product and they take customer orders online. G-Tel owns shops that sell smartphones and accessories direct to the customers.
    The coca Cola Company is a non-alcoholic beverage company. It manufactures, market and sells, beverage concentrates, referred to as beverage bases and syrups, including fountain syrups and finished sparkling and still beverages. In 2010. It acquired the North American business of Coca Cola Enterprises, The Coca Cola Company used forward vertical integration to move a step closer to their consumers.
    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    Small businesses use market penetrations as a strategy for entering a new market. The aim of market penetration is to effectively use product to enter the market as quick as possible and seize a large market share. It has an unbelievable potential to grow profitability and revenue. It is also a strategy which can be used by small business to increase sales and decrease the competitors.
    Moreover, marketing penetration strategies consist of price adjustment. Lowering prices is an effective tactic to attract potential customers. After thoroughly analyzing the prices of your competitors you can either increase prices to show buyers that the quality of your product/service exceeds your competitors or lower them to charm potential consumers with reasonable prices.
    When small businesses increase promotion activities in order to create awareness to potential customers eventually they can easily penetrate in the market. Investing more time and strength in a promotion can dramatically increase market penetration. Advertising is one of the most effective ways to increase brand awareness. Distribution channels is most constructive components of market penetration strategy. For example Bata Shoe Company, its source of income was selling through retail outlets but they opened another channel of email marketing and telemarketing.
    Increase Usage of a product. Marketing penetration can be increased through product consumption. Some small businesses use effective marketing strategy that will increase product awareness in certain areas it will result in higher product consumption that will also increase market penetration.
    Market development- is a process of increasing product or services into a new geographical area. Target market is also an important element in market development in order to identify the potential market. Target market are those segments of the population that the small business owner deems to be potential customers. A variety of criteria ranging from income level, to age, to geographic location can be used to determine these targets, depending on the product or services you sell.
    The target market should be specific to the type of business and should be discerned through market research and experience. Chicken Slice Zimbabwe is a company which owns fast food outlets. The company opened its first project in Mvuma along Harare – Masvingo highway. The Mvuma food court incorporates a pizzeria, coffee and ice cream, fried chicken and an express convenience superette. Chicken slice targeted Harare as a potential market for opening new outlets.
    Product development is another method which can be used by small businesses to attract customers. Product development strategy is a process of developing new products or modifying existing products so they appear new, and offering those products to current or new markets. It requires keen attention to competitors and customer needs now and in the future the ability to finance prototypes and manufacturing processes, and a creative marketing and communication plan.
    Subsets of product development strategy are very essential namely, product development diversification strategy and product modification strategy. Product development diversification strategy is employed when a company’s existing market is saturated and revenues and profits are stagnant or falling. This method takes a company outside of its existing business and new product is developed for a new market. For instance, Arm and amp; Hammer Baking Soda extended its brand to toothpaste.
    Product modification strategy are generally aimed at existing markets, although a side benefit may be the capturing of new users for new product. For example of this strategy is toothpaste. Toothpastes that promote whitening ability or anti-cavity attributes are built on existing plain toothpastes that only promise clean teeth.
    3. List three industries where cooperation among competitors is most likely and explain why.
    Cooperation can be defined as a voluntarily arrangement in which two or more entities engage in a mutually beneficial exchange instead of competing. Cooperation can happen where resources adequate for both parties exist or are created by their interaction. For example:
    a) Automobile Industry
    b) Software Industry
    c) Mobile Industry
    These industry use technology to develop their products. Most of the Software Company cooperate together as a strategy to develop new software. Software is not static, the processes and applications are constantly changing. Cooperation in Software industry is facilitated or driven, by the ecosystem of developers, plug-ins, software-development kits and application-programming interfaces (APIs) and add-ons that drive added value and increase stickiness for products.
    Software industry plays a critical role in knitting together or enabling development of new models. Companies like LinkedIn and Skype have thrived using the “freemium” model. Both cultivated a large base of users with their basic, no-cost platform, and then introduced several paid- for options, ranging from recruiting services and tiered access and networking privileges in the case of LinkedIn and landline calling in the case of Skype. Another example, Nike took this approach with one of its shoe lines. It created Nike+, a sensor compatible with Apple iOS devices (for instance, the iPod or iPhone), to be used with its running shoes.
    Some Automobile industry cooperate to revive brand, for example Volvo is undergoing a brand revival under Geely, the Chinese company that bought the automaker from Ford Motor Co. in 2010.Volvo have given the automaker soma room to experiment with the final member of its 90 series family. Wagons have historically been cornerstone of Volvo’s fleets.
    Mobile industry companies cooperate because of the sophisticated unified communication features from desktops and laptops- like instant messaging, presence, content sharing and auto and videoconferencing but mobile collaboration has been an afterthought for many vendors. For example Whale Managed Services, a UC managed service provider gas recently announced Crystal Blue (CB) Mobile for the iPhone, iPad and Android smartphones. CB Mobile is a software offering that allows any user device to operate as an employee’s desk phone. Allowing calls from the user’s mobile device to appear as if they were made from their office phone number. Real Presence Mobile software have allowed for PDF file-sharing via a link, but users will now be able to share Microsoft Word, PowerPoint or Dropbox files during a call with Mobile3.0.
    4. Identify three joint ventures that have worked especially well in the past.
    Join venture is a business practice through which two or more parties from a strategic alliance to share their intellectual property and knowledge. General Motors Co. has initiated join venture with companies in foreign countries, including Al-Monsour Automotive in Egypt, Uzbek in Uzbekistan, and VW Motori in Italy. General Motors venture into the Chinese market is one of the most recognizable in the automotive industry. In 1997 General Motors formed Shanghai General Motors and has forged several joint ventures with local producer ventures under brands such as Baoun, Jiefang and Chevrolet.
    Furthermore. A cooperation between Japanese conglomerate Sony and Shanghai Oriental Pearl Group. The joint venture with the Chinese company helps to market Sony’s PlayStation products in the country.
    Another example of joint venture is a cooperation among News Corporation Disney and NBC Universal, which together formed Hulu, an online video streaming site. These giants in the industry cooperate and combine their programs instead of competing with each other
    5. List four important reasons why many mergers and acquisitions fail.
    Not focusing enough on customers and sales
    The most fundamental scorecard of acquisition success is financial performance and on that count its’s far more important to focus on revenue growth than cost control. Some scholars said a 1% shortfall in revenue growth requires a 25% improvement in cost savings to stay on track to create value. Conversely, exceeding revenue growth targets with your newly acquired company by only 2 to 3 percent can offset a 50 % failure on cost reduction. Meanwhile, the worst thing is to have a sales drop-off immediately after the acquisition which is too common. Given confusion among the newly merged team and the customer base because you can never make up those lost sales.
    Not communicating clearly or enough
    In the absence of information and clear communication, rumors will fly and people at the acquiring company will assume the worst. Communication clearly and honestly and consistently. It is very essential to communicate with all stakeholders for the development of business. Avoid distortion of information by selecting proper communication channels. Most of the acquisition and merger fail because of poor communication methods.
    Misleading the new company’s culture.
    Culture plays an important role in the management and operation of a business. Corporate culture is associated with the norms and values which everyone follow for the survival of a business. If two companies are in the same business, it does not mean they have the same culture. It is very easy for the acquisition company’s integration team to conceit in with “winner syndrome” and fulfill the worst fears of the new staff. Success is inevitable, If they enter the new company’s offices carrying themselves with the four H’s: honesty, humility, humanity and humor.
    Getting the deal structure or price wrong
    If the acquisition company pays too much in an auction environment, it is tough to get the acquisition to show a positive return on investment. Some acquisition company protect themselves by structuring acquisitions with half or more of the purchase price held back on achievement of future performance hurdles. However, well intentioned deal structures that held back payments based on performance ended up having unintended consequences and souring the deal. For instance a major payment milestone is based on post-acquisition sales performance but 99% of the sales people are working for the parent company and therefore are neither aware of nor incentivized by the sales milestones. The acquisition company employees may well feel demoralized due to having scant control over achieving major payment milestones.
    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
    Related diversification is a system whereby a business adds or expands its existing products lines or markets. Google embark in related diversification to different internet-related products and services. These are productivity tools such as Gmail and Google Drive, enterprise products such as Google Search Appliance, online advertising and publishing services such as AdWords and AdSense and other online services such as Google News, Google Translate and Google Maps
    Diversification is an effective business strategy of Google because it has allowed the company to create new markets and retain existing customers or users, thereby creating a general customer base of Google-dependent Internet users. Furthermore, diversification has enabled the Internet giant to position itself as a one –stop venue for all Internet-related needs. Google has successful expand its Internet empire through several large-scale acquisitions. Google acquired YouTube and SkyBox Imaging to obtain its satellite technology and improve the accuracy and clarity of Google Maps. Google also extended its online advertising business when it acquired DoubleClick.
    Unrelated diversification is a form of diversification when the business adds new or unrelated product lines and penetrates new markets. The unrelated diversification is based on the concept that any new business or company, which can be acquired under favorable financial conditions and has the potential for high revenues, is suitable for diversification.
    The acquisition of the Android mobile operating system is unrelated diversification made by Google. This acquisition was partly responsible for popularizing the smartphone and tablet markets and for helping Google establish its firm grounds on the mobile landscape and mobile markets
    Through related and unrelated diversification as well as acquisitions Google enabled to enter new markets and improve existing market shares. Moreover as a technology strategy, these acquisitions have allowed the Internet giant to improve its technological capacities by empowering existing products and services and exploring other valuable technology-related ventures.
    7. When would market development generally be the preferred strategy over backward or forward integration?
    Market development strategy is a process of achieving growth by leveraging product knowledge in order to reach new customers. Market development strategy is an idea option to take over backward or forward integration when an organization discovered other opportunities of increasing its market share through:
    Increasing present customers’ rate of use of the product and services of a company. This goal can be achieved by increasing the size of purchases, maximizing the rate of product obsolescence, finding new uses of your product, advertising other uses of the product and offering incentives for increased use.
    Attracting competitors’ customers. A company can lure customers away from competitors by establishing differentiation of products, increasing advertising efforts or cutting prices. A brand name can play an important role to attract competitors’ customers. Brand image can be used a marketing tool to lure new customer
    Attracting nonusers to buy the products. This process can be done by offering trial uses of your products, adjusting the price and promoting other uses to attract these customers. A market research process can be used to identify potential market segment.
    Expanding geographically- geographical expansion works well for a company that wants to expand its service territory because it needs a physical location to serve its customers. Many big companies like McDonalds, Wal-Mart and Home Depot, have exported their operations to other countries through market development strategy.

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    Four examples of technology acquisitions are:
    a) Whatsapp acquired by Facebook in February 2014
    b) Microsoft acquired LinkedIn in June 2016
    c) Google acquired Skybox Imaging in June 2014
    d) Oracle acquired DNS provider Dyn in January 2017

    • Gaining competitive advantage-Oracle plans to add Dyn’s DNS solution to its bigger cloud computing platform, which already sell/provides a variety of infrastructure as a Service (IaaS) and Platform as a Service (PaaS) products and competes against companies like Amazon’s AWS.
    • Revenue growth-Facebook acquired WhatsApp because it is a powerful revenue model and other successful messaging apps were showing the potential for it to add many more. Assuming most current users end up paying the $1/year, that’s a potential revenue stream of several hundred million dollars a year from WhatsApp’s current revenue model alone. Meanwhile, other messaging apps like Line and WeChat have demonstrated the power of “stickers,” user to user payments, ecommerce and other revenue streams.
    • To improve the quality of products and services- Google Inc. said it is acquiring satellite company Skybox Imaging Inc. for $500 million as it works to bolster its mapping services and improve Internet access. Skybox satellites helps to keep Google Maps accurate with up to date imagery. It also improve Internet access and disaster relief –areas Google has long been interested in. Google is scouring the technology universe for deals that push into new markets and bolster its traditional services, including mapping and search.
    • Market growth- Microsoft acquired LinkedIn as a strategy to increase its market growth and to reassert itself in a technology market it once dominated. The deal was about bringing together the professional cloud and professional network. Furthermore, valuable is the data that recruiters spend thousands of dollars a month to use it to fill job openings. The interconnections of the business world, could really benefits Microsoft from a sales standpoint.
    Technology acquisition is now very common because information technology bring greater efficiency in organization operations, better working environments and effective decision making processes. Many organizations are trying to catch up the development gap with the industry by means of technology acquisition. Technology acquisition process is essential in developing a good management information system for an organization. Moreover, technology acquisition will be compatible and compliment with existing operating systems to enhance good quality of products and service.

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  23. SANDRA MATOPE
    20165454 THM
    Q1. Identify five situations when forward integration is a particularly good strategy
    i. To gain a competitive advantage- Through this, it is possible for you to invest and develop the products that you are offering. With highly specialized assets, you can now differentiate your business from your competitors, allowing you to gain highly competitive advantage. Through this, you can increase your share within the market, leading to increased business profits. For example Martell Home Builders in Canada uses websites to sell their products instead of realtors and this increases their sales as compared to their competitors.
    ii. Controlling Retail- Zappos is a good example of a company that employs forward integration through controlling every aspect of distribution of its products. Zappos manages every form of distribution in-house, including the high rent, high-profile retail stores, and its wholesale operation selling shoes to screen printers and boutiques and the online store that sells internationally.
    iii. Forward integration allows a manufacturer to better respond to changes in demand more effectively. The value of this benefit increases with the degree of product perishability, the rate at which product popularity changes over time. Such a benefit of forward integration is quite significant for mobile phone manufacturer, for example Samsung, as it deals with quickly changing consumer trends by continuously releasing new models of its mobile phones e.g. Samsung Galaxy s8
    iv. When a company wants to control the distribution process- manufacturers can reduce steps in the distribution process and sell higher up in the distribution process. This can benefit both the manufacturing firm and the retailer or customer it sells to because one step and one mark-up have been passed over. Manufacturers can also retain more control over the distribution and pricing of their products by selling to retailers or customers and this can be also done through use of websites. The Coca Cola Company used forward vertical integration to move a step closer to their consumers.
    v. When the company wants to expand its market and increase its revenue and profits. Expanding the places where a company does business and advertises its products and services opens up a larger customer base and potentially greater profit margins. For example PepsiCo.’s decision to enter the snack food market makes sense. The soft drink giant established distribution channels in grocery stores and gas stations around the world. Therefore, moving from the cooler to the stock shelf was a leap worth making.
    Q2. What three strategies defined do you feel are most widely used by small businesses?
    Market Penetration
    This type of strategy seeks to increase market share for present products or services in present markets through greater marketing efforts. This strategy increases the product sales in the company’s present markets through an aggressive marketing mix. It is usually introduced to: increase the rate of product/service usage; encourage repeat purchases and attract consumers away from competitors. Usually wholesale distributers use this strategy to break into new markets for examples Powersales in South Africa makes use of this by offering low prices and discounts.
    Market development
    This type of strategy involves introducing present products or services into new geographic areas. A company follows a market development strategy for a current brand when it expands the potential market through new users or new uses. New users can be found in new geographic segments. Marketing strategies gives small businesses a direction toward effective promotion. For example Paula’s Place a fast food outlet in Zimbabwe has expanded into different towns nationwide to expand its market offering different products and unique services.
    Product development
    Developing new products or modifying existing products so they appear new, and offering those products to current or new markets is the definition of product development strategy. This type of strategy seeks to increase sales by improving or modifying present products or services. It requires keen attention to competitors and customer needs now and in the future, the ability to finance prototypes and manufacturing processes, and a creative marketing and communications plan which can be useful for small businesses. For example Jameson hotel in Harare has developed its services by improving its technology e.g. online reservations, automated locking systems and more technological advancements for their guests.
    Q3. List three industries where cooperation among competitors is most likely and explain why.
    i. Automobile industry: It only seems that in the world there are many independent automakers. At the moment there are really only a few big automakers in the world that actually share the global automotive market.
    ii. Airline industry- Competition in the airline industry is intense as barriers to entry are low due to liberalization of market access, a result of globalization. According to the IATA (International Air Transport Association), about 1,300 new airlines were established in the last 40 years.
    iii. Pharmaceutical industry- They are associated with a huge expenditure that is invested towards developing new products through research and development. Hence, cooperation allows the firm to enjoy from research and development activities of that firm.

    Q4. Identify three joint ventures that have worked especially well in the past.
    i. Kellogg Company And Wilmar International Limited- manufacture, sale and distribution of cereal, wholesome snacks and savoury snacks in China.
    ii. Daimler AG, the global automotive company and Rolls-Royce Group plc, the global power systems company, announced public tender offer for 100 percent of the share capital of Tognum AG. The public tender offer is intended to be carried out by a 50:50 joint venture company.
    iii, Sony-Ericsson is a joint venture between Sony and the Swedish company Ericsson. Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company.

    Q5. List four important reasons why many mergers and acquisitions fail.
    i. No common vision- In the absence of a clear statement of what the merged company will stand for or how the organisation will operate there is no point of the convergence and the organisations will never blend.
    ii. Poor governance- Lack of clarity as to who decides what and no clear issue resolution process will cause problems.
    iii. Poor communication and misgauging the strategic fit
    iv. Poor programme management- Insufficiently detailed implementation plans and failure to identify key interdependencies between the many work streams brings the project to failure

    Q6. Related diversification- Google acquiring Gmail and Youtube as an expansion of its services
    Unrelated diversification- Google diversifying into the automobile industry and developing a self-driving car.

    Q7. When would market development generally be the preferred strategy over backward or forward integration?’
    Market development is the process of growing your customer base and establishing yourself as an industry leader. Forward integration is a type of vertical integration where a manufacturer acquires the channels of distribution of its outputs to achieve greater economies of scale or higher market share.
    Market development can generally be a preferred strategy over backward or forward integration when new unsaturated markets exist and also when an organization has excess production capacity. It can also be preferred when, an organization has excess production capacity; and also when an organization’s basic industry is becoming rapidly global in scope.
    Market development is also preferred has these advantages: it is associated with low risk, results in firms earning more profits, the firms are highly confident that the new products will be successful, the firm can gain a huge market share,
    Q8. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    i. Dell Inc agrees to buy EMC for $67 billion in 2015

    ii. Microsoft buys LinkedIn for $26.2 billion in 2016
    iii. Facebook buys WhatsApp for $22 billion in 2014
    iv. Avago Technologies agrees to buy Broadcom for $37 billion in 2015
    Reduced Costs- a merged company can reduce many of its expenses. Budgets for things like marketing might be trimmed, while the new, larger company enjoys greater purchasing power, which lowers the costs of raw materials and other necessities. Market Penetration- by merging, the new company is theoretically provided with access to more customers. Diversification- merged companies can offer a greater range of products and services. Skills and Knowledge- the merged company can make use of the very best minds from both companies and make up for shortfalls in the individual companies’ skill-sets.

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  24. Caelleen Sapita
    20158012
    Masters in Business Admin

    QSN 1.Identify five situations when forward integration is a particularly good strategy

    a. When an organization’s present distributors are especially expensive, unreliable, or incapable of meeting the firm’s distribution needs
    b. When the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward
    c. When an organization competes in an industry that is growing and is expected to continue to grow markedly
    d. When an organization has both the capital and human resources needed to manage the new business of distributing its own products. For example, Apple Inc. has been working on forward integration strategy since many years. Currently, Apple has 361 stores around the world under its ownership.
    e. When the advantages of stable production are particularly high;

    QSN 2.What three strategies defined do you feel are most widely used by small businesses?

    a. Cost
    For example, Ikea. The Swedish furniture retailer Ikea revolutionized the furniture industry by offering cheap but stylish furniture that attract customers. Ikea is able to keep its prices low by sourcing its products in low-wage countries and by offering a very basic level of service.

    b. Differentiation
    For example, Etsy, an online artisan store and shopping gallery offers its users the chance to showcase their handmade wares and sell them to customers around the world. From their beginnings as a crafter’s paradise, Etsy has carved out a niche company through sales of craft supplies as well as homemade items. Through Etsy, a community of crafters has found a home on the internet and the world has been opened to the amateur crafter who wishes to sell their products.. Etsy is relying on the diversity of the products they offer to differentiate themselves from the hundreds of available craft sites online.
    c. Focus
    This is when a business focuses on just one or a small number of target market segments. For example, Ferrari and Rolls-Royce, are classic examples of niche players in the luxury automobile industry. Both these companies have a niche of premium products available at a premium price.

    QSN 3.List three industries where cooperation among competitors is most likely and explain why.
    a. Automobile companies
    b. Mobile industry
    c. Software industry

    QSN 4. Identify three joint ventures that have worked especially well in the past.

    Sony-Ericsson
    Sony-Ericsson is a joint venture between Sony and the Swedish company Ericsson. It is an example of a joint venture that has worked well in the past. Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company. Ericsson used to get chips from Philips, but in March, 2000, a fire destroyed the production facility of Philips. Facing an acute shortage of chips, Ericsson was prompted to form a joint venture with Sony. On February 16, 2012, Sony acquired Ericsson’s share in the venture and renamed the company as Sony Mobile Communications. Sony Mobile shifted its headquarters from Lund, Sweden to Tokyo, Japan on January 7, 2013.
    Siemens AG and Nokia Corp Joint Venture
    In 2006, Siemens AG of Germany and Nokia Corp of Finland formed a joint venture called Nokia Siemens Networks U.S. It is headquartered in Espoo, Greater Helsinki, Finland. The formation of this joint venture was prompted by the mergers in the industry like that of Alcatel with Lucent. Its need also arose due to the rising tendency in the low-cost Chinese manufacturers like Huawei Technologies Co. Ltd. The joint venture was formally announced on June 19, 2006, and it was officially launched in February, 2007 in Barcelona at the 3GSM World Congress. The company started operating fully on April 1, 2007 and has continuously operated since then in 150 countries. In 2011, the company was rated by measure of revenues as the fourth largest manufacturer of telecom equipment. In this respect, it is next only to Ericsson, Huawei, and Alcatel Lucent.
    Microsoft and GE Joint Venture, Caradigm
    In December, 2011, Microsoft Corporation and General Electric formed a joint venture which is a health IT company of its own kind. Their common objective was to improve patient experience and the economics of health and wellness through providing the health systems with required systemwide data and intelligence. The joint venture, known as Caradigm, aims at combining technology and clinical applications to transform it into intelligence which is usable by care providers. The name Caradigm evolved from ‘care’ and ‘paradigm,’ because Microsoft and GE intended a paradigm shift in the care delivery system.

    QSN 5. List four important reasons why many mergers and acquisitions fail.

    a. Poor communication – Messages too frequently lack relevance to their audience and often hover at the strategic level when what employees want to know is why the organization is merging, why a merger is the best course action it could take, in what way the company will be better after the merger, how it will “feel”, how the merger will affect their work and what support they will receive if they are adversely impacted
    b. Weak leadership – If senior managers do not walk the talk, if their behaviours and ways of working do not match the vision and values the company aspires to, all credibility is lost and the merger’s mission is reduced to meaningless words.
    c. Limited or no involvement from the owners – Advisors usually have a limited role, till the deal is done. Owners should be involved right from the start and rather drive and structure the deal on their own, letting advisors take the assistance role
    d. No common vision – there should be a clear statement of what the merged company will stand for, how the organization will operate.
    QSN 6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
    a. Related diversification – Since it is in the information business, Google purchased Titan Aerospace, a maker of solar-powered drones in 2004.
    b. Unrelated diversification – Google self-driving car project

    QSN 7.When would market development generally be the preferred strategy over backward or forward integration?
    a. When new channels of distribution are available that are reliable, inexpensive and of good quality
    b. When an organization is very successful at what it does
    c. When new untapped or unsaturated markets exist
    d. When an organization has the needed capital and human resources to manage expanded operations
    e. When an organization has excess production capacity
    f. When an organization’s basic industry is becoming rapidly global in scope.

    QSN 8.In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    a. Samsung, the electronics and mobile device giant, acquired audio and automotive company Harman to the tune of $8 billion late this year. The acquisition is one of the year’s biggest in terms of price, and Samsung is betting big on connected cars with this one.
    b. Snapchat acquired Bitstrips them back in March 2016 and rolled them into their app as ‘bitmoji’. Snapchat paid $100 million for the privilege!
    c. Microsoft acquired LinkdIn – LinkedIn is the first of the big social media sites to be bought up by one of the old-guard tech companies, Microsoft. Moreover, this is Microsoft’s biggest acquisition yet.
    d. Verizon made a deal to buy Yahoo for $4.4 billion when the company was struggling with continuously declining revenue figures. The acquisition would keep Yahoo! intact as a brand, but effectively kill it as an independent company in 2016.

    This strategy is now popular due to the following reasons
    a. Deflated valuations at certain private and public tech companies.
    b. Low interest rates that make borrowing to finance deals easier.
    c. Corporations with loads of cash on hand to purchase other companies.

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  25. Petronella Kawondera
    20158013
    MBA
    Qn 1. Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with examples.
    (i) When an organization’s present distributors are especially expensive, unreliable, or incapable of meeting the firm’s distribution needs;
    (ii) When the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward;
    (iii) When an organization competes in an industry that is growing and is expected to continue to grow markedly;
    (iv) When an organization has both the capital and human resources needed to manage the new business of distributing its own products;
    (v) When the advantages of stable production are particularly high;
    Qn 2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    There are three different models that firms can apply: – Cost leadership – Differentiation and Focus strategy
    (i)Cost Leadership Strategy Any enterprises applying this model, they focus on producing standardized products and sell products with a very low per-unit cost to consumers. This will attract consumers who are sensitive to price. The strategy can be used to target at large markets. Firms can use either a low-cost strategy or a best-value strategy. For a low-cost strategy, firms offer products or services to customers at the lowest price compared to rivals on the market. For a best-value strategy, firms offer products or services to customers at the best value compared to rivals’ price at similar attributes of products on the market. If a firm has a low-cost position, it will gain more returns although there are many strong competitors in the industry.
    (ii)Differentiation strategy Firms using the model will produce differentiated products and services. And products can be many degrees of differentiation. They can be different in design, brand image, technology, features, customer service, dealer network, product performance, useful life, ease of use and so on. A firm must be careful to study buyers’ needs and preferences to determine the feasibility before pursuing the differentiated strategy. And a firm can charge a higher price for its differentiated product and to gain customer loyalty.
    (iii)Focus Strategy Firms applying the model will produce products and services to serve a particular group of consumers. They aim at small markets. There are two types of focus strategies. (1) Firms offer products or services to a niche group of customers at the lowest price compared to rivals’ on the market. (2) Firms offer products or services to a niche of customers at the best value compared to rivals’ price on the market. This will help to offer best value products or services to meet customers’ tastes better than rivals’ do and the price can be higher than rivals’.
    Qn 3. List three industries where cooperation among competitors is most likely and explain why.
    (i) Automobile companies
    (ii) Mobile companies
    (iii) Software companies
    These are various companies which at a time cooperate with each other. At times they depend on each other for making a segment in their company. For example, Japanese cars can fixed in some parts of Germany cars.
    Qn 4. Identify three joint ventures that have worked especially well in the past.
    A joint venture is when two or more parties, whether individuals or entities, enter into an agreement to combine resources for a specific business undertaking.
    (i) Kellogg Company Joins with Wilmar International Limited
    Kellogg Company entered into a joint venture agreement with Wilmar International Limited for the purpose of selling and distributing cereal and snack foods to consumers in China. While Kellogg brings to the table an extensive collection of globally renowned products as well as their expertise in the industry, Wilmar offers marketing and sales infrastructure in China, including an extensive distribution network and supply chain. Joining together allows both companies to profit from the relationship.

    (ii) The Joint Venture of Hulu
    The 2008 joint venture launched by NBC Universal Television Group (Comcast), Fox Broadcasting Company (21st Century Fox), and Disney-ABC Television Group (The Walt Disney Company) to create the enormously popular video streaming website “Hulu” is one example of a large scale partnering of companies that has been very profitable.
    (iii) The joint venture of Sony and Ericsson
    Sony Ericsson is a joint venture that was formed in 2001 by Japanese electronics maker Sony and Swedish telecom company Ericsson. Since joining forces, both companies have stopped producing their own mobile phones. Originally, the two companies were compatible partners for the joint venture. Sony was a major electronics brand with expertise in the industry, and Ericsson was a leading company in the communications sector. Sony could enter the mobile phone market on a leading company’s coattails, and Ericsson could stay on the cutting edge with the newest technologies (in particular the mobile handset sector which was a key sector at the time) from Sony.
    Qn 5. List four important reasons why many mergers and acquisitions fail.
    (i) No common vision
    (ii) Poor governance
    (iii)Poor communication
    (iv)Weak leadership
    Qn 6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
    (i) A hypothetical example of related diversification for Google is when google has an application where business people can communicate and share ideas and their business experiences.
    (ii) A hypothetical example of unrelated diversification is when Google decides to go into the clothing line.

    Qn 7. When would market development generally be the preferred strategy over backward or forward integration?
    Market development would be preferred over backward and forward integration when they identify and develop new market segments for current products. A market development strategy targets non-buying customers in currently targeted segments. It also targets new customers in new segments.
    Qn 8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    a) Dell Inc. acquired EMC in 2016
    b) Microsoft acquired LinkedIn in June 2016
    c) Avago Technologies acquires Broadcom in 2015
    d) Oracle acquired DNS provider Dyn in January 2017
    Technology acquisition has become popular because everything is all about technology nowadays so companies want to gain the competitive advantage in that it has made life so much easier in the workplace and also organization needs to be up to date when it comes to technology.

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  26. Mohammad hammouri
    Student no:20169036
    Introduced to: dc karen
    Department:tourism and hotel managment

    A1
    Forward integration is a business strategy that involves a form of vertical integration whereby business activities are expanded to include control of the direct distribution or supply of a company’s products. This type of vertical integration is conducted by a company moving down the supply chain.
    1. When an organization’s present distributors are expensive or unreliable. When the availability of quality distributors is limited as to offer a competitive advantage to those firms that integrate forward. (Starbucks Inc. moves down closer to customers by acquiring many stores across the world up to 23,000 in 120 countries as at 2016, in order to expand its operation and to cut cost.)

    2. When an organization competes in an industry that is growing and is expected to continue to grow markedly. (Apple Inc. has 361 stores all over the world.)

    3. When an organization has both the capital and human resources needed to manage the new business of distributing its own products. (United Nations Children’s Fund (UNICEF) )

    4. When the advantages of stable production are particularly high. 
5. When present distributors or retailers have high profit margins. (Construction industry)


    A2
    a) Product Differentiation Strategy
Small companies will often use a product differentiation strategy when they have a competitive advantage, such as superior quality or service. For example, a small manufacturer or air purifiers may set themselves apart from competitors with their superior engineering design. Obviously, companies use a product differentiation strategy to set themselves apart from key competitors. However, a product differentiation strategy can also help a company build brand loyalty.
    b) Keeping costs down: All the high-performing companies strove to keep their production budgets low and their prices competitive. However, even when confronted with a sagging economy, they refused to shirk on quality; as a result, most had slightly higher prices than their slumping counterparts, and they attributed their success, in part, to delivering superior goods and services while avoiding price wars.
    c) Customization: Focus involves a restriction of activities to only a part of the market (a segment) through.Providing goods and/ or services at lower cost to that segment.


    A3
    1 – Airline industry; airlines sell other airlines’ tickets. Although less common than it used to be, airlines still offer to sell their competitor’s product- a seat on a particular flight- typically to complete a round trip at a convenient time or to provide a connection to a city the first airline does not serve. This means airlines must have access to each other’s schedules, fares and availability on a current basis.
    2 – Software and technology industries – when a significant number of firms have more copy rights and patents rights, cooperation is the best strategy because other firms can easily retaliate.
    3 – The automotive industry. A good example is the 2003 joint venture of Peugeot and Toyota to share knowledge and parts to build a new urban car, which resulted in the Peugeot 107 and the Toyota Aygo.

    Reasons:
– There is a high cost requirement for the firm to compete in its industry from tools equipment and utilities.
– The industry benefits from low deal transaction costs

    Using an alliance with a competitor to acquire new technologies or skills is not devious. It reflects the commitment and capacity of each partner to absorb the skills of the other.

    A4

    A joint venture is a contractual business undertaking between two or more parties.Companies choose to enter joint ventures in order to share strengths, minimize risks, and increase competitive advantages in the market place. Joint ventures can be distinct business units in this case a new business entity may be created for the joint venture or collaborations between businesses the know-how, the latter the means.
    Three joint ventures that have worked especially well in the past are as follows,
    • A cooperation between Japanese conglomerate Sony and Shanghai Oriental Pearl Group is another example. China had banned game consoles from 2000 until January 2014, which caused companies such as Sony difficulty in penetrating the Chinese market. The joint venture with the Chinese company helps to market Sony’s PlayStation products in the country

    • The 2003 joint venture of Peugeot and Toyota to share knowledge and parts to build a new urban car, which resulted in the Peugeot 107 and the Toyota Aygo.

    • Another example of joint venture is a cooperation among News Corporation, Disney and NBC Universal, which together formed Hulu, an online video streaming site. These giants in the industry cooperate and combine their programs instead of competing with each other.
    A5
    The major reasons why many mergers and acquisitions fail are as follows:
    1. Lack of clarity and execution of the integration process
    A major challenge for any M&A deal is the post-merger integration. A careful appraisal can help to identified key employees, crucial projects and products, sensitive processes and matters, impacting bottlenecks, etc. Using these identified critical areas, efficient processes for clear integration should be designed, aided by consulting, automation or even outsourcing options being fully explored
    2. Misgauging Strategic Fit
    If the acquisition is too far outside the parent company’s core competency, things might not work the way they are expected for example a company that sells to its business customers chiefly through catalog and Internet sales must be cautious about acquiring a company that relies on direct sales. Similarly, a company whose traditional strength lies in selling products to businesses must strategize before making a foray into a consumer-oriented business.
    3. Poor governance Lack of clarity as to who decides what, and no clear issue resolution process. Integrating organizations brings up a myriad of issues that need fast resolution or else the project comes to a stand-still. Again: speed matters, but with a sound decision-making process.
    4. Poor communication Messages too frequently lack relevance to their audience and often hover at the strategic level when what employees want to know is why the organization is merging, why a merger is the best course action it could take, in what way the company will be better after the merger, how it will “feel”, how the merger will affect their work and what support they will receive if they are adversely impacted.
    5. Poor program management insufficiently detailed implementation plans and failure to identify key interdependencies between the many work streams brings the project to a halt, or requires costly rework, extends the integration timeline and causes frustration.
    A6
    Related diversification is when a business adds or expands its existing product lines or markets. For example, google also have a section for YouTube and Gmail.

    On the other hand, unrelated diversification is when a business adds new, or unrelated, product lines or markets. For example, google have diversified into the automobile industry and have developed a self-driving car. The Google self-driving car project is now Waymo, which stands for a new way forward in mobility. It is a self-driving technology company with a mission to make it safe and easy for people and things to move around.

     A7
    Market development refers to the process by which a company develops its existing market rather than looking for new markets. The company looks for new buyers to pitch the product to a different segment of consumers in an effort to increase sales.
    Market development would be preferred mainly When new channels of distribution are available that are reliable, inexpensive and of good quality. This will result in increased productivity.
    Market development is a preferred strategy over backward or forward integration especially when new unsaturated markets exist and also when an organization has excess production capacity.
    In addition, market development will generally be the preferred strategy over backward or forward integration if the market is relatively attractive and also if the business is able to adapt to the new market maintaining its current competitive advantage in the new market
    A8
    1. Tech acquisitions have taken place in recent weeks, with OpenText buying Dell’s enterprise content division, HP grabbing Samsung’s printer business, SoftBank snapping up Cambridge-based chipmakers ARM and Verizon agreeing to buy Yahoo Inc for $4.8 billion (£3.6 billion), not to mention Oracle’s latest acquisition of NetSuite. In fact, 2016 has been packed full of major tech acquisitions. We’ve listed some of the most notable corporate takeovers to occur in 2016.

    2. Here are some reasons why this strategy is now popular:

    Increasing capabilities: Increased capabilities may come from expanded research and development opportunities or more robust manufacturing operations (or any range of core competencies a company wants to increase). Similarly, companies may want to combine to leverage costly manufacturing operations (as was the hoped for case in the acquisition of Volvo by Ford).

    Gaining a competitive advantage or larger market share: Companies may decide to merge into order to gain a better distribution or marketing network. A company may want to expand into different markets where a similar company is already operating rather than start from ground zero, and so the company may just merge with the other company.

    Diversifying products or services: Another reason for merging companies is to complement a current product or service. Two firms may be able to combine their products or services to gain a competitive edge over others in the marketplace. For example, in 2008, HP bought EDS to strengthen the services side of their technology offerings (this deal was valued at about US$13.9 billion).

    Cutting costs: When two companies have similar products or services, combining can create a large opportunity to reduce costs. When companies merge, frequently they have an opportunity to combine locations or reduce operating costs by integrating and streamlining support functions.

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  27. RONALD CHIKUDO
    20160477
    TOURISM AND HOSPITALITY
    Question 1.
    Forward integration is a type of vertical merger (vertical integration) in which a supplier acquires a manufacturer or a manufacturer acquires a distributor.Businesses engage in forward integration either to generate a higher margin from a key input which it owns or produces or to better market its products and increase its profitability.
    The forward integration may be an effective strategy in following five situations:
    1. Existing distributors and retailers are expensive and not able to meet the distribution requirements of the firm.
    2. When there are no quality distributors available which gives competitive edge to the firm over its competitors.
    3. When an organization has resources in terms of human resources to manage and finance to meet the expenses of distribution channels.
    4. When the organization has high production facilities to meet the demand of customers. Forward integration will strengthen organization value chain from production till sales and support of the products.
    5.When the current retailers or distributors have high margin which increase the cost of the product and will result in high price of the product. By implementing forward integration company can reduce the cost of distribution and lower the price of the products to increase it sales.
    Examples of forward integration
    In theory the forward integration tactic of a manufacturer selling directly to end customers is an even greater leap. However, the Internet and mobile technology have made direct-to-consumer selling much more feasible and common. Many small handcrafted or customized product businesses take customer orders online and either ship immediately, or make goods to match the customer’s parameters. Once an order is ready, it is shipped directly to the customer. Depending on volume, you may need a warehouse facility to hold materials and finished goods.
    Natural health care products company Comvita purchased its Hong Kong distributor GreenLifeLtd. for NZ$9.03 million in 2007. Comvita’s chairman indicated the forward integration withGreenLife’s retail stores, sales staff, and in-store promoters would allow the firm to quickly andeffectively launch new products into the Asian market through the use of websites and other e- medias.
    Apple Inc. has been working on forward integration strategy since many years. Currently, Apple has 361 stores around the world under its ownership. Microsoft inspires from Apple Inc. are going to open its own stores to directly interact with customer to understand their needs and wants.
    A company performs forward integration when it merges with or purchases an organization involved in the distribution of its products. The 2003 purchase of DirectTV by News Corporation is an example of a forward integration through acquisition. DirectTV is a satellite TV company, and its purchase enabled News Corporation to use it as a medium to distribute more of its news, movies and television shows by managing the process itself.
    Controlling Retail
    American Apparel is the classic example of a company that employs forward integration through controlling every aspect of distribution of its products. AA manages every form of distribution in-house, including the high rent, high-profile retail stores, its wholesale operation selling clothing to screen printers and boutiques and the online store that sells throughout the United States and internationally. Warehousing and distribution is also managed internally from the company’s Los Angeles factory.
    Canadian communications giant Rogers is an example of forward integration. The company established Rogers TV, a subsidiary company that operates local television channels. The Rogers TV channels show programs such as cooking and talk shows, which are produced by Rogers-managed television studios. These provide Rogers with an opportunity to advertise and sell its digital products using an electronic version of a retail store.

    Question 2

    What three strategies defined do you feel are most widely used by small businesses?
    A small company can use a number of business strategies, depending on its situation. For example, new companies may face different challenges than companies that are more established. Therefore, the business strategies they implement may be different from those of key competitors. Four types of business strategies include the growth, product differentiation, price skimming and acquisition strategy.
    Growth Strategy
    A growth strategy entails introducing new products or adding new features to existing products. Sometimes, a small company may be forced to modify or increase its product line to keep up with competitors. Otherwise, customers may start using the new technology of a competitive company. For example, cell phone companies are constantly adding new features or discovering new technology. Cell phone companies that do not keep up with consumer demand will not stay in business very long. A small company may also adopt a growth strategy by finding a new market for its products. Sometimes, companies find new markets for their products by accident. For example, a small consumer soap manufacturer may discover through marketing research that industrial workers like its products. Hence, in addition to selling soap in retail stores, the company could package the soap in larger containers for factory and plant workers.
    Product Differentiation Strategy
    Small companies will often use a product differentiation strategy when they have a competitive advantage, such as superior quality or service. For example, a small manufacturer or air purifiers may set themselves apart from competitors with their superior engineering design. Obviously, companies use a product differentiation strategy to set themselves apart from key competitors. However, a product differentiation strategy can also help a company build brand loyalty, according to the article “Porter’s Generic Strategies” at QuickMBA.com.
    Price-Skimming Strategy
    A price-skimming strategy involves charging high prices for a product, particularly during the introductory phase. A small company will use a price-skimming strategy to quickly recover its production and advertising costs. However, there must be something special about the product for consumers to pay the exorbitant price. An example would be the introduction of a new technology. A small company may be the first to introduce a new type of solar panel. Because the company is the only one selling the product, customers that really want the solar panels may pay the higher price. One disadvantage of a price-skimming is that it tends to attract competition relatively quickly, according to the Small Business Administration. Enterprising individuals may see the profits the company is reaping and produce their own products, provided they have the technological know-how.
    Acquisition Strategy
    A small company with extra capital may use an acquisition strategy to gain a competitive advantage. An acquisition strategy entails purchasing another company, or one or more product lines of that company. For example, a small grocery retailer on the east coast may purchase a comparable grocery chain in the Midwest to expand its operations.

    Question 3.
    Industries where cooperation among competitors is most likely are as follows:
    • Software electronics or mobile companies, For exampleSamsung and LG
    • Automobile/car manufacturing companies. Peugeot and Toyota cooperated together to come up with
    • Clothing companies, for example Nike and Adidas
    Reasons for cooperation includes
    • To reduce completion among rivalry, thereby reducing costs of facing completion.
    • To share information that is of greater use to both parties, be it technological information, financial, research and development among others.
    • To share the cost and technology of development.
    • To share the risks of doing business.
    Question 4.
    Generally joint venture is an agreement between two or more partners to own and control local and overseas business. It is a special type of strategic alliance that involves setting up a new business entity, generally involving management separate from that of the partners own management teams. Indeed international joint ventures are often a result of two or more companies identifying the potential for synergies wherein each partner brings to the venture what the other partner needs but is lacking in.
    Toyota and Citroen
    First example is Toyota and Peugeot Citroen which entered into an international joint venture to jointly develop and build a small fuel efficient car for the European market. The primary benefit for Toyota was the opportunity to expand its model line up in Europe. The major success for Peugeot was that of gaining a new small car for its European product line while sharing the development costs with Toyota.
    Sony and Ericson
    Sony Ericsson, which is an international joint venture between Swedish telecom giant “Ericsson” and Japanese consumer electronics manufacturer “Sony”. Sony Ericsson was established in 2001 as a 50/50 joint venture between Sony and Ericsson. These two companies joined hands together to introduce a new and innovative range of cellular phones in the global market by exploiting each other’s expertise and competencies in the design and technological fields (Career, 2009).
    Disney and NBC
    Another example of joint venture is a cooperation among News Corporation, Disney and NBC Universal, which together formed Hulu, an online video streaming site. These giants in the industry cooperate and combine their programs instead of competing with each other.
    Question 5
    .List four important reasons why many mergers and acquisitions fail.
    •Poor governance and lack of clear issue resolution process
    •OverstatedSynergies
    •Lack of clarity and execution of the integration process
    • Misgauging Business Fit.
    Question 6.
    Related diversification strategy is a multiproduct strategy that determines what markets the business should be in. Diversification is: “the entry of a firm or business unit into new lines of activity, either by process of internal business development or acquisition, which entail changes in its administrative structure, systems, and other management processes “(Ramanujam& Varadarajan, 1989) these are all factors Google considers when releasing a new product.Google has hundreds of products that it is so diverse, many of these products appear to hold the same core competencies but beyond these values there are distinct differences. Each product provides something different to the customer and has its own niche. Thus Google follows a unrelated and related diversification strategy.

    Related diversification for google
    Is when a business adds or expands its existing product lines or markets. Of course, Google’s No. 1 business isn’t really search; it’s advertising. But how long can the company depend almost entirely on revenue from ads alone? The answer depends on how successful the company can be in diversifying its approaches to extracting revenue from service-based offerings.
    Online search has always been the main service and product of Google. The company initially capitalised on its search technology that it began developing since 1996. But it later diversified to different Internet-related products and services.These include productivity tools such as Gmail and Google Drive, enterprise products such as Google Search Appliance, online advertising and publishing services such as AdWords and AdSense, and other online services such as Google News, Google Translate, and Google Maps, among others.
    The varied Internet-related products and services have enabled Google to corner diverse Internet users and make them dependent to a certain extent. Take note that these products and services are complementary, thus benefitting users due to ease of use from familiarity and hassle-free transition using a single all-access account.
    Google I/O solidified another major direction that had been previously hinted at: Google Now predictive search. Many common searches already produce answers from related queries. Google Now is being tooled to provide preemptive information based on one’s location or movement habits. These, in turn, give Google and its partners new monetization opportunities — assuming consumers don’t find a way to preemptively opt out of them as well.
    Diversification is an effective business strategy of Google because it has allowed the company to create new markets and retain existing customers or users, thereby creating a general consumer base of Google-dependent Internet users. Furthermore, diversification has enabled the Internet giant to position itself as a one-stop venue for all Internet-related needs.

    UnrelateddiversificationforGoogle
    On the other hand, unrelated diversification is when a business adds new, or unrelated, product lines or markets. Customer and has its own niche. Thus Google follows an unrelated and related diversification strategy.Google search engine, Google+ and Android are all major examples of valued but yet very different products. All three products help fulfil Google’s mission of providing the world’s information in an easier manner (Google Inc, 2010, P. 1)For example, google have diversified into the automobile industry and have developed a self-driving car. The Google self-driving car project is now Waymo, which stands for a new way forward in mobility. It is a self-driving technology company with a mission to make it safe and easy for people and things to move around.
    Question 7.
    Market development refers to the process by which a company develops its existing market rather than looking for new markets. The company looks for new buyers to pitch the product to a different segment of consumers in an effort to increase sales. Backward and forward integration involve the integration of two or more businesses.Market development would be preferred mainly when:
    • When an organization’s basic industry is becoming rapidly global in scope.

    • When new channels of distribution are available that are reliable, inexpensive and of good quality. This will result in increased productivity.
    • Market development is a preferred strategy over backward or forward integration especially when new unsaturated markets exist and also when an organization has excess production capacity.
    If the market is relatively attractive and also if the business is able to adapt to the new market maintaining its current competitive advantage in the new market.
    • When the company wants to reduce the risk of product failure market development is preferred. For instance, when a product reaches maturity, market development is necessary in order to increase sales rather than integrating with another company.
    • When new channels of distribution are available that are reliable, inexpensive and of good quality
    • When an organization has excess production capacity

    • When new untapped or unsaturated markets exist
    • When an organization has the needed capital and human resources to manage expandeoperations
    • When an organization has excess production capacity

    QUESTION 8
    In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.

    Microsoft acquired LinkedIn.
    LinkedIn is the first of the big social media sites to be bought up by one of the old-guard tech companies, Microsoft;this is Microsoft’s biggest acquisition yet. The acquisition was popular in that LinkedIn could be embedded with Skype, an email system and other enterprise products so that it could be able to recreate the connective tissue for enterprises.

    FacebookbuysWhatsApp(2014)
    The social media company expanded its messaging capabilities with this purchase. WhatsApp has very low costs, so it should eventually be wildly profitable this is a reason why it is popularly used by customers of all walks of life.
    OracleacquiredAddThis(2016)
    Add is a social bookmarking start-up that allows website owners to add socialmedia sharing widgets, with users bookmarking their content using third-party services such as Facebook, Twitter, and Pinterest. The acquisition was popular because Add expanded its services to provide publishers with information about the types of interest their readers had demonstrated on the other sites they visit.
    Samsung acquired Harman
    Samsung, the electronics and mobile device giant, acquired audio and automotive company Harman to the tune of $8 billion late this year. The acquisition is one of the years biggest in terms of price, and Samsung is betting big on connected cars with this one.
    This strategy is now popular due to the following reasons:
    • Acquisition is one of the most time-efficient growth strategies.It offers the opportunity to quickly acquire resources and core competencies not currently held by the company
    • Acquisition will quickly build market presence for the company, increasing market share while reducing the competition’s stronghold. Where competition has been particularly challenging, growth through acquisition can reduce competitor capacity and level the playing field. Market synergies are achieved.
    • Acquisition as a route for gaining resources and competencies currently not held. These can have multiple advantages, ranging from immediate increases in revenues to improving long term financial outlook to making it easier to raise capital for other growth strategies. Diversity and expansion can also help a company to weather periods of economic or market slump.

    • Acquiring organizations with low share value or low price earning ratio can bring short-term gains due to assets stripping. Synergy between the surviving and acquired organizations can mean substantial cost savings as well as more efficient use of resources for soft financial gains.
    • Acquiring an existing entity can often overcome formerly challenging market entry barriers while reducing risks of adverse competitive reactions. Market entry can otherwise be a costly proposition, involving market research among other upfront expenses, and take years to build a significant client base.

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  28. Cagin Bulakbasi
    20154757

    1. Forward Integration is gaining ownership or increased control over distributors or retailers. Forward integration is considered to be an especially effective strategy if an organization’s present distributors are expensive, unreliable, or incapable of meeting the firm’s distribution needs. The availability of quality distributors can be limited as to offer a competitive advantage to firms embracing forward integration. Since forward integration increases an organization’s ability to diversify it might serve to develop a backup in a very competitive market. A company may have an abundance of capital and human resources which make is less costly for forward integration. If present distributors have high profit margins from the product a company can increase profitability and comprehensiveness through forward integration.
    2. Intensive strategies like market penetration, market development and product development can be considered the most used strategies employed by smaller companies. While it is unlikely that a small organization can employ all of these strategies at the same time pursing one of them seems to be the best option. Diversification and integration strategies can be very costly and it may be more profitable and competitive to pursue forward integration. Also if the advantages of a stable production or high, forward integration can result in increased predictability for the market demand.
    3. Cooperation among competitors is viable if there is a very high cost in entering a new market or dealing with a product or service that requires high technical skill. The high requirements for development entry may make cooperating with competitors much more profitable as both sides can contribute their share without making all of the high cost investments. High end technology is one of the industries where cooperation is likely because of the amount of technical skilled required. Another industry that is open for cooperation is airline services. With extremely high costs in investment for fleets an logistics hubs cooperation between cooperations can lead to profit maximization. Another motivation can be new emerging markets for all industries. While the local partner can benefit from the experience of the international partner, they can assist each other in local contacts and development on the other hand.
    4. Joint ventures is a strategy that occurs when two or more companies form a temporary partnership for the taking advantage of an opportunity. Although temporary and reliant on the context such ventures may provide to beneficial if utilized correctly. Some examples that have been successful can be Walmart’s venture with Cifra and IBM’s venture with Twitter and Facebook.
    5. Mergers occur when multiple organizations of the same size unite and acquisition occurs when a larger organization purchases a smaller organization. Since new players and dynamics are added to the company it contains several risks as well. The main reasons which cause acquisitions and mergers can be summarized as, integration difficulties, inadequate evaluation of target, large amount of debt, inability to achieve synergy, too much diversification, too big acquisitions, different organisational cultures and reduced employee morale caused by change in structure.
    6. Related diversification can be considered diversifying goods or services offered in a related industry an manner. An example of related diversification can be a university starting their own high school. While targeting different customer profile the organization still can benefit from the same business model and has experience required for the sector. With slight differences in staff and on a smaller scale such diversification can be achieved. Unrelated diversification is the diversification of goods and services offered by an organization to entirely different areas. An example of unrelated diversification for Google can be the company entering the production industry with cars, phones watches and glasses.
    7. Market development involves introducing present products and services into new geographic areas. Market development can be beneficial if; new channels of distribution are available that are reliable, cheap, inexpensive and good quality, if untapped and unsaturated markets exist, if the organization has the capital and human resources necessary and if the organization has excess capacity.
    8. In technology acquisitions tend to be more common than mergers at the moment. One reason behind this is that the risks and costs associated with research and development. For organizations it might be less risky even if not less expensive to buy an already developed working technology than take the risk and developing it on their own. Another issue that facilitates acquisitions is the size and financial capacity of technology giants. New organizations are happy to sell their ideas rather than compete with these giants in an industry with high barriers to entry. Some of the recent technology acquisitions are Microsoft buying LinkedIn, Oracle buying Net Suite, Samsung buying Harman and Google buying Apigee.

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  29. CHIDO NDORO
    20155614
    MIB

    Assignment 2 – Types of Strategy

    1. Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with examples.
    When there are adequate resources and competencies to cater for the new business. For example Pepsi can access their customers directly by opening a Pepsi shop which sells its drinks and snacks. In Zimbabwe, the Lobels Bakery has its own mini-shop on their premises which sells single units of bread, scones, doughnuts, tea loaves and buns apart from where big orders are purchased. The premises to open the shop, staff and products are readily available in one place.
    When there are insufficient distributors who are not providing value services to the whole industry. For instance due to 2007-8 fuel shortages in Zimbabwe, distributors started to prioritise orders of those customers who would give them a huge sum of money as bribe rather than first come first serve. Barley and wheat farmers who provided raw materials to the beer industry ended up buying their own trucks to facilitate these deliveries on their own to their customers.
    When there are long term benefits in performing production and distribution. For example Door to door Organics which sells natural foods online in the US and deliver the groceries at the given address. At first the supermarket may have had one truck to offer these door to door services. These trucks were added when more and more deliveries were being made. The company would benefit from this in the long term by hiring these trucks out to other supermarkets thereby increasing revenues.
    When distributors services are expensive and they are not able to meet customer needs. For instance LG tvs distributor may charge a very high percentage of commission for each tv set sold so to avoid this LG then decides to open a number of LG outlets to reach their customers. The customer’s order may take a while longer than expected when the distributor is not directly linked to LG manufacturing.
    When the distributors are realising high profits. For example a telecommunications company in Zimbabwe called Econet Wireless decided to open small shops countrywide for them to sell their lines and phones directly to customers thus taking advantage of every cent thus making higher profits.

    2.What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    Differentiation strategy is a technique that focuses on developing and marketing different products for different market segments. For example small businesses can follow Delta Beverages in Zimbabwe which produces expensive wines and spirits to the high income earners, lager beer to the middle class and traditional beer to low income earners.
    Market Development is the marketing of the existing products to the new markets. For instance Aurex Jewellers in Zimbabwe may decide to introduce their existing jewellery to larger markets such as China.
    Diversification is a strategy which aims at entering new markets which the business is not in and introducing a new product for that new market. For example TN Zimbabwe started as fast food outlets, and then had a TN bank and TN furniture selling company. Unfortunately this led to closure of all TNs because businesses did not go well.

    3. List three industries where cooperation among competitors is most likely and explain why.
    -Lab testing industry because there is need to buy testing services from each other and to share elements when one lab runs out. To ensure quality staff from competing laboratories may be asked to carry out inspections and as well do some testing just to be sure.
    -Telecommunications Industry because there is need to agree on a certain range of tariffs to charge customers who cross network.
    -Pharmaceuticals industry because there is need to work together on certain components of drugs and set price ranges.

    4. Identify three joint ventures that have worked especially well in the past.
    -Wilmar International Limited and Kellogs to introduce their products in China.
    -General Motors and Uzbek in Uzbekistan to sell their motor vehicles in that country.
    -NBC Universal, Disney and News Corporation to form a video streaming website namely Hulu.

    5. List four important reasons why many mergers and acquisitions fail.
    -Failure to read the culture of the new company.
    – Poor communication and management.
    – Absence of common vision between and among companies.
    – Mistakes on the deal or value structure.

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
    Example of related diversification is when Google introduced various applications in one place for easy access like Google drive, Calendar, Play, Translate and Google+ that is seen when Google Chrome is opened.
    Example of unrelated diversification is when Google acquired Titan Aerospace which makes solar panelled drones. Google to sell coffee mugs, flasks and T-shirts with their name printed on it.

    7. When would market development generally be the preferred strategy over backward or forward integration?
    -When the market is to grow because of new customers.
    -When it is more profitable than backward and forward integration.

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    EMC was to be acquired by Dell in 2015
    LinkedIn was acquired by Microsoft in 2016
    HP bought Cloud cruiser in 2017
    Google acquired Titan Aerospace which manufactures solar panelled drones in 2014
    This helps the organisations to meet the demand in the technology market. It also increases revenues and curbs competition.

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  30. TRUST T GUMUNYU
    20165791
    TOURISM AND HOTEL MGMT DEPARTMENT

    Q1. Identify five situations when forward integration is a particularly good strategy?
    Forward integration is whereby a firm gains ownership or increased control over its previous owners for example if a manufacturing company engages in sales or after sales industries maybe through the use of websites in order to sell directly to the consumers. This strategy is often referred to as a good strategy because it addresses the following scenarios:
    • In the traditional model manufacturer could not engage with their consumers as they had to use distributors and retailers resulting in the manufacturers making small profits compared to wholesalers’ profit margins. However with the internet’s ability to connect them directly with people who want their goods, manufacturers can take the wholesalers’ profits for themselves for example Birkenstock Orthopadie Company (a Germany shoe manufacturer) use Amazon online site to distribute its products and its profit margins are very favourable due to this ability to control the distribution process.
    • To improve convenience because the manufacturing industry is evolving due to the implementation of technology and this is changing the way people shop or do business. To improve the convenience of business transactions with customers a manufacturing company can create a website so that the customers can purchase directly from the manufacturer from the comfort of their couches. Furthermore there will be the ability of same day shipping and overnight services and most established manufacturing companies have very convenient websites for example Under Armour Inc website.
    • To gain a competitive advantage as the manufacturing company will now be able to aggressively market its products on its own because in some instances distributors and retailers fail to aggressively market the manufacturer`s products as they will be wanting to minimise on promotional costs but due to forward integration, the manufacturers will be able to effectively promote their products on their own for example car manufacturing companies like Volkswagen aggressively promote their products due to the ability to directly engage with customers.
    • To understand the market maybe through observing the engagements of customers on their websites for example the frequency of people logging onto their website will give them an idea of the response of their market and in addition the manufacturing company can be able to keep a database of its customers and will also be able to evaluate its performance as on websites people can give feedback. Innoson Vehicle Manufacturing Company (Nigerian car manufacturing company) keeps a customer database due to assessing their website`s engagements with customers.
    • To enable differentiation, manufacturers can pursue forward integration because in the traditional model, using distributors and retailers would mean these distributors and retailers would sell rival products using the same platform and methods and this did not stipulate any clear distinction between two different products. For example Nike can now clearly differentiate itself from Adidas and vice versa is also true unlike a scenario whereby one retailer would sell both Adidas and Nike products.

    Q2. What three strategies defined do you feel are most widely used by small businesses?
    Product development
    Making product improvements can be used to create new interest in a stagnating product or to offer an extra benefit when using it. It requires a lot of innovation and this will definitely improve the market`s perception of the product. This will give small businesses a competitive edge over bigger companies as customers want to be associated with companies that are innovative in order for their needs and wants to be continuously satisfied. For example CUT hotel in Chinhoyi, Zimbabwe (one star hotel) since it is a very small hotel it added an event on their products and they labelled it Thursday Jazz night whereby the hotel bar will host a free Jazz show every Thursday and besides the admission being free there was an improved number of people in the bar and this increased the beverage sales and in the long run uplifted the overall image of the hotel.
    Market penetration
    A small business in order to establish itself in a market it has to have operations that will enable itself to effectively penetrate the market and ensure survival. There are a lot of strategies that can be implemented for example; a business can use competitive pricing, increase in marketing communications or utilizing reward systems such as loyalty points or discounts. For examples a new hotel in order to establish itself it has to offer discounts as evidenced by Golden Peacock hotel in Zimbabwe, it was established in 2012 and despite the competition from already established hotels like Holiday Inn and Leopard Rock Hotels (its nearby rivals) it was able to effectively penetrate the industry as it aggressively marketed its brand through offering discounts, hosting musical gigs whereby they invited the best musical artists in Zimbabwe every weekend and as its image grew it started participating in Corporate social Responsibility.
    Market development
    A company follows a market development strategy for a current brand when it expands the potential market through new users or new uses. New users can be found in new geographic segments, new demographic segments, new institutional segments or new psychographic segments. Another way is to expand sales through new uses for the product. A market development strategy targets non-buying customers in currently targeted segments. It also targets new customers in new segments. For example Chicken slice a fast food outlet in Zimbabwe faced a lot of competition from bigger outlets like Nando’s and Chicken Inn but in order to survive pursued market extension as it started opening outlets in a lot of areas in a bid to try to saturate the market through its market development. This strategy is benefiting Chicken slice since the well established brands like Nando’s and Chicken Inn have very few outlets.

    Q3. List three industries where cooperation among competitors is most likely and explain why?
    They cooperate with each other to reach a higher value creation if compared to the value created without interaction and struggle to achieve competitive advantage. Often cooperation takes place when companies that are in the same market work together in the exploration of knowledge and research of new products, at the same time that they compete for market-share of their products and in the exploitation of the knowledge created.
    I. Automobile industry- the arrangement between PSA Peugeot Citroen and Toyota to share components for a new city car simultaneously sold as the Peugeot 107, the Toyota Aygo and the Citroen C1, where companies save money on shared costs while remaining fiercely competitive in other areas.
    II. Banking industry- In order to uplift the image of banks through participating in combined Corporate Social Responsibility for example in South Africa, the Nedbank and the ABSA bank usually come together to sponsor the South African Soccer League resulting in the South African people becoming more familiar with these two banks because South Africa as a whole is a soccer loving nation
    III. Pharmaceutical industry- This field requires a lot of research therefore there are a lot of costs involved so due to this huge expenditure rival companies in this industry sometimes combine for better research to ensure growth within the industry for example two Indian companies cooperated (Strides Arcolab and Shasun Pharmaceticals amalgamated).Their main goals where to accelerate strategies in research and to ensure growth.

    Q4. Identify three joint ventures that have worked especially well in the past?
    • Sony-Ericsson is a joint venture between Sony and the Swedish company Ericsson. Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company. This joint venture resulted in better productivity and this venture yielded a lot of profits since it captured a huge market share.
    • Three big companies; Sadara, Saudi Kayan, and SAAC signed a contract to form a joint venture, the Saudi Butanol Company. Saudi Kayan Petrochemical Company is affiliated with Saudi Basic Industries Corporation, better known as SABIC. Sadra Chemical Company is a joint venture of ARAMCO and Dow. Saudi Acrylic Acid Company is affiliated with Tasnee and Sahara Petrochemicals Company. The butanol plant is planned to be the first in the Middle East and the largest in the world.
    • British luxury car manufacturers (Jaguar Land Rover) entered into a joint venture with the Chinese company Chery Automobiles. The joint venture company is known as Chery Jaguar Land Rover Automotive Company was established in 2012.

    Q5. List four important reasons why many mergers and acquisitions fail?
    Mergers and acquisitions (M&A) are defined as consolidation of companies. Differentiating the two terms, a merger is the combination of two companies to form one, while an Acquisition is one company taken over by the other.
    • Failure to adjust to the post merger or post acquisition era: A major challenge for any Merger & Acquisition deal is the post-merger or post-acquisition era which involves the implementation of the agreed policies as disputes may arise due to conflicting interests.
    • Cultural integration issues: Each organisation has its own culture and the culture differs from one organisation to the other. In times of a merger or an acquisition there will be need to integrate a new culture and it is difficult so there is need to come up with a plan that will set aside cultural differences
    • Ignorance It may take time for the new organisation to kick start its operations since top managers of both organisations involved tend to overlook the issues concerning the legal permissible preparation work so without a proper preparation regarding clearance from the regulatory authorities it may take a longer period for the new organisation to start its operations.
    • No common vision This result in confusion since in most instances managers fail to communicate its business rationale or its new goals for the new established organisation therefore employees tend to flounder in the ensuing confusion. This therefore means that in the absence of a clear statement of what the merged company will stand for, how the organisation will operate, what it will feel like, and what will be different compared to how things are today, there is no point of the convergence on the horizon and the organisations will never blend.

    Q6. Related diversification- This is whereby an organisation acquires a business which is in the same line of operations for example Google acquiring Facebook Messenger as an expansion of its services
    Unrelated diversification- This is a form of exploring other lines of business, that is, acquiring a non related business for example Google diversifying into the automobile industry and developing a self-driving car.

    Q7. When would market development generally be the preferred strategy over backward or forward integration?’
    • When there is need for market extension- Market development enables an organisation to tap into new markets and in this strategy the business, sells its existing products to new markets through further market segmentation to aid in identifying a new clientele base for example Guinness beer. This beer had originally been made to be sold in countries that have a colder climate, but now it is also being sold in African countries because the African market was not saturated.
    • When there is need for organisational growth: For an organisation to grow in size it can use market development through opening branches in new areas. Market development is less complicated compared to vertical integration when there is need for firm growth and this is because vertical integration requires the acquisition of another business and in order to acquire another business it is costly and time consuming as there are a lot of procedures to abide by but with market development the organisation is operating on its own and there is no need to reach into agreements with other lines of business.

    Q8. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular?
    • Dell Inc agrees to buy EMC for $67 billion in 2015
    • Microsoft buys LinkedIn for $26.2 billion in 2016
    • Facebook buys WhatsApp for $22 billion in 2014
    • Avago Technologies agrees to buy Broadcom for $37 billion in 2015

    Improved idea generation- technology acquisitions enables better decision making in the organisation because through acquiring a business, the organisation is also acquiring its expertise as it will have full control over its expertise. This will definitely improve the operations of the organisations due to this full access to expertise of the other business resulting in improved idea generation since with expertise comes great innovation resulting in better decision making.
    Absorb competition– acquisition of technology can be used as a guard against competition and this is an effective strategy in order to avoid an organisation from being forced out of business as it would have identified the potential of the other organisation for example Facebook saw the potential of WhatsApp and it safeguarded itself from facing stiff competition by buying WhatsApp.

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  31. NAME: EVANS PARADZAI
    STUDENT #: 20166601
    DEPT: BUSINESS ADMINISTRATION
    1. Forward integration is good when the following conditions apply;
    (i) When an organization’s present distributors are especially expensive, unreliable, or incapable of meeting the firm’s distribution needs.
    (ii) When the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward.
    (iii) When an organization competes in an industry that is growing and is expected to continue to grow markedly.
    (iv) When an organization has both the capital and human resources needed to manage the new business of distributing its own products.
    (v) When the advantages of stable production are particularly high.
    (vi) When present distributors or retailers have high profit margins.
    2. The three integrative strategies used by small businesses are market penetration, backward integration and horizontal integration.
    i. Market Penetration involves promoting an existing or inversely a new products so as to increase its market share through various promotional strategies such as advertising, discounts, promotional sales(Idirim).
    ii. Backward integration is the seeking of ownership or increased control of a firm’s suppliers. J.P. Morgan outsourcing its technology operations to firms such as EDS and IBM is an example of backward integration.
    iii. Horizontal integration is the seeking of ownership or increased control over competitors. An example of horizontal integration is when Reader’s Digest Association acquired Reiman Publications LLC. Horizontally integrated businesses may benefit from economies of scale. Once a company reaches a certain size, the cost of increased business operations grows at a much lower rate than the profit from those activities. For smaller companies, the drawback of this type of integration lies in consumer perception.
    3. Three industries where cooperation among competitors is most likely;
    i. Airline Industry
    – Companies in the airline industry integrate for the purposes of benefiting from economies of scale thus benefit from cost control and coordination of activities as this is a very complex industry that needs effective strategies in its operations. For example Star Alliance which has 28 member airlines, each with its own distinctive culture and style of service. Alliance members come together to offer smooth connections across a vast global network. Members include Turkish Airlines, Ethiopian Airlines, Egypt Airlines, among others.
    ii. Automobile industry
    – -Companies in the automobile industry also coordinate their activities also to benefit from economies of scale, also to control competition as the industry has a lot of competitors. For example the Renault–Nissan Alliance which is a strategic partnership between automobile manufacturers Renault and Nissan. The strategic partnership between Renault and Nissan is not a merger or an acquisition. The two companies are joined together through a cross-shareholding agreement.
    iii. Oil & petrol industry
    Coordination is most common in the oil industry, oil companies also coordinate to enjoy economies of scale in various forms, most importantly to control the cost of this valuable resource that is used in almost all processes of production of most industries, i.e. petrol is a source of energy in all the processes in the airline & automobile industry. For example the Big Oil is a name used to describe the world’s seven or eight largest publicly owned oil and gas companies, also known as super-majors. The super-majors are considered to be BP plc., Chevron Corporation, ExxonMobil Corporation, Royal Dutch Shell plc. , Total SA and Eni SpA, with ConocoPhillips Company
    4. Three joint ventures that have worked well in the past;
    i. Nokia Siemens Networks U.S
    Siemens AG of Germany and Nokia Corp of Finland formed a joint venture called. The company started operating fully on April 1, 2007 and has continuously operated since then in 150 countries. In 2011, the company was rated by measure of revenues as the fourth largest manufacturer of telecom equipment.
    ii. Sony-Ericsson
    A joint venture between Sony and the Swedish company Ericsson. Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company.
    iii. Caradigm
    Microsoft Corporation and General Electric formed a joint venture which is a health IT Company of its own kind. The joint venture aims at combining technology and clinical applications to transform it into intelligence which is usable by care providers
    5. Four reasons mergers & acquisitions fail;
    I. Managers who should collaborate daily in operating the merger are not involved in forming or shaping the venture.
    II. If the merger benefits the partnering companies but may not benefit customers who then complain about poorer service or criticize the companies in other ways.
    III. If the merger is not supported equally by both partners, which creates problems.
    IV. The venture may begin to compete more with one of the partners than the other.
    V. Misrepresentation of the true state (due diligence) of the companies i.e. one of the companies may have been misrepresented at inception of the joint venture to give a good picture which may not be true.
    VI. Failure to adjust to the post-merger or post acquisition era
    6. GOOGLE
    Related diversification
    – Google acquiring Facebook Messenger as an expansion of its services
    Unrelated diversification
    – Google diversifying into the automobile industry and developing a self-driving car.
    7. Market development generally would be the preferred strategy over backward or forward integration?
    I. When there is need for organizational growth: For an organization to grow in size it can use market development through opening branches in new areas.
    II. When there is need for market extension- Market development enables an organization to tap into new markets and in this strategy the business, sells its existing products to new markets through further market segmentation to aid in identifying a new clientele base.
    III. When new channels of distribution are available that are reliable, inexpensive and of good quality.
    IV. When an organization is very successful at what it does.
    V. When new untapped or unsaturated markets exist.
    VI. When an organization has the needed capital and human resources to manage expanded operations.
    VII. When an organization has excess production capacity.
    VIII. When an organization’s basic industry is becoming rapidly global in scope.
    8. Four examples of technology acquisitions in the past 2 years and explain why this strategy is now popular;
    Dell Inc agrees to buy EMC in 2015.Microsoft buys LinkedIn for in 2016.Facebook buys WhatsApp in 2014.Avago Technologies agrees to buy Broadcom in 2015.
    Improved idea generation- technology acquisitions enables better decision making in the organisation because through acquiring a business, the organisation is also acquiring its expertise as it will have full control over its expertise. This will definitely improve the operations of the organisations due to this full access to expertise of the other business resulting in improved idea generation since with expertise comes great innovation resulting in better decision making.
    Absorb competition– acquisition of technology can be used as a guard against competition and this is an effective strategy in order to avoid an organisation from being forced out of business as it would have identified the potential of the other organisation for example facebook saw the potential of whatsapp and it safeguarded itself from facing stiff competition by buying whatsapp.

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  32. Rueben Chidzonga
    20166634
    Marketing

    1.Identify five situations when forward integration is a particularly good strategy.

    a)when there are Limited number of distributors who can offer a competitive advantage
    b) when an organization competes in an industry that is growing and is expected to continue to grow markedly
    c) when the advantages of stable production are particularly high
    d) when present distributors or retailers have high profit margins
    e) when an organization has both the capital and human resources needed to manage the new business of distributing its own products
    2.What three strategies defined do you feel are most widely used by small businesses?

    a)Cost Leadership Strategy- Any enterprises applying this model, they focus on producing standardized products and sell products with a very low per-unit cost to consumers. This will attract consumers who are sensitive to price. The strategy can be used to target at large markets. Firms can use either a low-cost strategy or a best-value strategy. For a low-cost strategy, firms offer products or services to customers at the lowest price compared to rivals on the market. For a best-value strategy, firms offer products or services to customers at the best value compared to rivals’ price at similar attributes of products on the market. If a firm has a low-cost position, it will gain more returns although there are many strong competitors in the industry.
    b)Differentiation strategy- Firms using the model will produce differentiated products and services. And products can be many degrees of differentiation. They can be different in design, brand image, technology, features, customer service, dealer network, product performance, useful life, ease of use and so on. A firm must be careful to study buyers’ needs and preferences to determine the feasibility before pursuing the differentiated strategy. And a firm can charge a higher price for its differentiated product and to gain customer loyalty.
    c)Focus Strategy- Firms applying the model will produce products and services to serve a particular group of consumers. They aim at small markets. There are two types of focus strategies. (i) Firms offer products or services to a niche group of customers at the lowest price compared to rivals’ on the market. (ii) Firms offer products or services to a niche of customers at the best value compared to rivals’ price on the market. This will help to offer best value products or services to meet customers’ tastes better than rivals’ do and the price can be higher than rivals’.
    3. List three industries where cooperation among competitors is most likely and explain why.
    a)Automobile companies
    b)Mobile companies
    c)Software companies
    These are various companies which at a time cooperate with each other and also at times they depend on each other for making a segment in their company.

    4. Identify three joint ventures that have worked especially well in the past.
    a)Jaguar Land Rover and Chery Automobile
    b)Nokia and Siemens
    c)Sony and Ericsson
    5. List four important reasons why many mergers and acquisitions fail.
    a) Incompatible systems and processes
    b)Top management failure
    c) Overestimated synergies
    d) Changes in the business environment and external factors
    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
    a)Related diversification – mobile advertising.
    b)Unrelated diversification – self driving bicycles
    7. When would market development generally be the preferred strategy over backward or forward integration.
    a)Market development is associated with low risk.
    b) Market development results in firms earning more profit
    c)The firms are highly confident that the new products will be successful
    d)The firm can gain a huge market share
    8.The examples of technology acquisitions in the past 2 years
    a) Facebook’s acquisition of WhatsApp
    b)hp acquiring Electronic Data Corp
    c)Skype acquired by Microsoft
    d)Microsoft acquired LinkedIn
    This strategy is now popular due to deflated valuations at certain private and public technology companies. Low interest rates that make borrowing to finance deals easier. Corporations with enough cash at hand to purchase other companies. Also there is greater efficiency in organization operations, better working environments and effective decision making processes.

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  33. Raja El-Majzoub
    20168944
    MBA
    1.Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with examples.

    ► When an organization’s present distributors are especially expensive
    ► When the availability of quality distributors is so limited as to offer a competitive advantage
    ► When an organization competes in an industry that is growing
    ► When the advantages of stable production are particularly high
    ► When present distributors or retailers have high profit margins
    For Example Google : Before we dive into the data behind Alphabet’s forward-looking strategy, we must quickly assess its most mature and most profitable (by far) business line: Google search and advertising.
    It will be interesting to see whether Google Capital will pursue more PIPE (private investment in public equity) deals going forward, or if it will stick to traditional private growth equity investments.
    The financial scale of these commitments underscores the strategic weight Mountain View is placing upon these fields. AR/VR is a central pillar of Google’s forward-looking vision for computing.
    Its Magic Leap deal is a further diversification beyond various internal efforts (including the new consumer-ready Daydream mobile VR headset announced at the October 2016 event, along with older efforts such as Cardboard, Glass, and Tango).
    Google plex forward, such as:
    • A push into cloud and hardware.
    • An “AI-first” strategy .
    • A focus on AR/VR, autonomous driving, and digital health.

    ___________________________________________________
    2.What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    1-Market segmentation enables a small firm to compete successfully with a large firm by maximizing per-unit profits and per-segment sales.( Demographics, Geographic , Psychographics) for example: Falafel restaurant in north Cyprus.
    2. Pricing strategy for example It is cost show it is price.(Falafel price must be close to Doner around 15 Turkish Lira Max)
    3. Place(offer free delivery and make it close to university )

    _________________________________________________
    3. List three industries where cooperation among competitors is most likely and explain why.

    BMW vs. Audi vs. Mercedes-Benz – The New Age Competition
    The competition between the German brands is as furious as ever. BMW, Mercedes-Benz and Audi are all at each other’s throats. For decades, all three have held on to a specific brand image and maintained a steady reputation. But it seems now that all hell has broken loose and each brand is doing whatever they want, however they want, just to get ahead.
    Mercedes-Benz, a brand known for its sterling luxury reputation. A brand known for creating only the highest quality vehicles on the planet and over-engineering absolutely everything. This majestic brand just decided to make a front-wheel drive sedan, the size of one of Shaq’s shoes, that costs less than $30,000.
    Mercedes-Benz, a brand known for its sterling luxury reputation. A brand known for creating only the highest quality vehicles on the planet and over-engineering absolutely everything. This majestic brand just decided to make a front-wheel drive sedan, the size of one of Shaq’s shoes, that costs less than $30,000.
    But now, Audi is making mid-engined supercars with V10s in the R8 and ultra luxurious super sedans like the S8. Audi already has had the lower end car segment covered, the one that Mercedes and BMW are trying to get into, but now wants to try its hand at the ultra high-end.
    So it seems as if each big German is trying to copycat one another just to get a leg up in terms of sales. Many people think that BMW is going soft, and that’s not the case, it’s just trying to increase its market. This is sad, though. While each company had their own unique identity, something that made them worth buying, they seem to be like Russian Dolls, all the same. There was a time when each German carmaker had a unique personality and you bought them because of it. But now it seems as if you’re just buying similar cars with different badges. All in the name of sales figures.
    ________________________________________________
    4. Identify three joint ventures that have worked especially well in the past.

    A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Most joint ventures are incorporated, although some, as in the oil and gas industry, are “unincorporated” joint ventures that mimic a corporate entity.
    1-Sony Ericsson
    2-Floby Disk
    3- cd Walkman
    _____________________________________________________
    5.List four important reasons why many mergers and acquisitions fail.
    1. Misgauging Strategic Fit
    2. Misreading The New Company’s Culture
    3. Not Communicating Clearly — Or Enough
    4. Not Focusing Enough On Customers And Sales (vs. Cost Synergies)
    ________________________________________________
    6.Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
    Over the past week Google has announced its involvement in several interesting projects that could not be further from it’s basis as a search engine. The first of these announcements was in regards to Google’s development of technology designed to allow cars to drive themselves, completely automated and un-manned vehicles. The second was their announcement today that they have invested $5 billion in the first off-shore wind project in the United States. In the past Google has also invested in biotechnology companies, an electric car manufacturer, a wind farm in North Dakota, a company that produces computer processors, a company that helps teach people English, and more. Even Google’s software related businesses seem to be drifting away from a clear-cut centerpoint. Google now offers Health Record Management, 3D modeling, telephone routing, and 411 service.
    Its obvious that Google likes diversification and has a hard time turning down opportunities no matter how un-related they may be… They are addicted to diversification. But, over the long-run how will this impact their business? Almost every company struggles with a diversification addiction at some point. When times are good diversification puts unused cash to work. When times are bad companies diversify to re-invent themselves.
    The reason that Google will succeed in even the most bizarre acquisitions while other companies fail is that they take care of their core competency first. Most companies diversify before they perfect the core business on which they were built. Microsoft is a perfect example of a company that has diversified into other products before perfecting their core competency, operating systems. Microsoft has branched off into a bunch of directions (search engine, game consoles, internet access, touch-screen kiosks), doing each of their new efforts poorly. At the end of the day it has made Microsoft perceived negatively among its customers.
    Companies or investors should always evaluate acquisition prospects in terms of the business’s core. If the core business is operating smoothly then diversification makes sense, if there are outstanding improvements needed to the core business then there should not even be a thought of diversifying. Small business owners can heed this advice as well, look at your core competency first and only think of diversifying when your core no longer needs significant revamping.
    _________________________________________________
    7-When would market development generally be the preferred strategy over backward or forward integration?
    Vertical integration is a growth strategy that involves extending an organization’s present business in two possible directions:
    If a business integrates by moving into an area that serves as suppliers, the process is referred to as backward integration. In internal backward integration, the firm creates its own sources of supply, perhaps by establishing a subsidiary company. The external approach involves the purchase or acquisition of an existing supplier.
    If a business integrates by mowing into an area that serves as a customer or user of its products or services, the process is referred to as forward integration. A firm can accomplish forward integration internally by establishing it own production facility (if it is a supplier of raw materials), sales force, wholesale system, or retail outlets. External forward integration can be accomplished by acquiring firms that presently perform the desired function.
    The reasons for choosing a vertical integration strategy are more varied and sometimes less obvious. If a firm believes that it is paying more for materials than it would cost to produce its own, the temptation to integrate vertically is great. The attraction is still greater if getting materials from a supplier on time has been a problem or is expected to become problem.
    Therefore, the main reason for backward integration is the desire to increase the dependability of supply or quality of raw materials or production inputs.
    The rationale for forward vertical integration is similar: cost and effectiveness. Greater control over marketing and closer coordination between distribution channels and manufacturing may improve sales. Forward integration is a preferred strategy if the advantages of stable production are particularly high.
    However, both backward and forward vertical integration require investment generate a commensurate return. Particularly, backward vertical integration into raw and commodity materials may require a huge investment. Operation may have to reach a level of output that affords economies of a scale or otherwise be uneconomical to operate.
    Moreover, for vertically integrated firms, the risks result from expansion of the company into areas requiring strategic managers to broaden the base of their competencies and assume additional responsibilities . Therefore, organizations should adopt a vertical integration strategy with caution because integrated organizations have become associated with mature and less profitable industries. Escape from these industries is particularly difficult for a large, vertically integrated organization.
    The main lessons to be learned with regard to vertical integration are that:
    Critical complementary assets must be owned (mainly when they are specialized for the needs of the firm), unless their is a cash constraint. In this last case, the firm should try to form a partnership with at least a minority position.
    When critical complementary assets are not owned, the firm should secure early access to them, mainly when its product is not protected by a thigh regime of appropriability (it is an easy matter to copy it), and when the capability of complementary assets is in short supply and may become a bottleneck.
    Vertical integration involves a set of decisions that, by the nature of their scope, reside at the corporate level of the organization. Some of these decisions are discussed below.
    ________________________________________________
    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    1. Microsoft buys LinkedIn
    $26.2 billion is what Microsoft paid to have the professional social network join its ranks. LinkedIn’s stock struggled earlier in the year after it neglected to meet investors’ sky-high expectations and Microsoft recognized this as a good time to make an offer. They’re hoping that there will be synergies with Microsoft’s other enterprise businesses
    2. Oracle
    Company acquired: NetSuite
    Head count: 4,600 employees
    Annual sales: $741.1 million
    Purchase price: $9.3 billion
    Deal closed: Nov. 7
    Oracle struck a deal to acquire cloud application company NetSuite, gaining access to the San Mateo, Calif.-based company’s cloud ERP, CRM and ecommerce applications.
    NetSuite has been a fast-growing company, consistently reporting revenue growth between 30 percent and 35 percent every quarter. But the focus on growth came at a price: The company had yet to turn a profit, and financial analysts said pressure on the company’s stock indicated that investors were getting impatient.
    While NetSuite was originally most successful in selling to small and midsize businesses and organizations, more recently it had been adding large enterprises and global companies to its customer roster. Oracle has been expanding sales of its cloud-based applications in recent years, although its customer base is more weighted toward large enterprises.
    3. Broadcom
    Company acquired: Brocade
    Head count: 5,960 employees
    Annual sales: $1.96 billion
    Purchase price: $5.9 billion
    Date of announcement: Nov. 2
    Expected to close: By end of April 2017
    Semiconductor maker Broadcom is acquiring networking systems supplier Brocade Communications Systems, with plans to retain its fiber channel SAN switching business and divest Brocade’s IP networking business – including the recently acquired Ruckus Wireless.
    The deal breaks up San Jose, Calif.-based Brocade, which had just completed its $1.2 billion acquisition of wireless vendor Ruckus in May.
    Partners said Broadcom’s decision to divest the Brocade and Ruckus IP networking business has opened the door for customers to hold off on purchases. They said the divestiture creates uncertainty that is sure to impact the channel.
    4. Dell
    Company acquired: EMC
    Head count: 72,000 employees
    Annual revenue: $25 billion
    Purchase price: $65 billion
    Deal closed: Sept. 7
    Nearly a year after it was announced, the landmark acquisition of Hopkinton, Mass.-based EMC by Dell is complete, creating Dell Technologies, a more than $70 billion, privately-held global IT behemoth based in Round Rock, Tex., with designs on dominating markets from budget PCs to high-end data center infrastructure and the cloud.
    With the acquisition, Dell can address markets from its traditional strengths in consumer PCs, servers and small- and midsize-business data centers to the largest data centers in the world, as well as red-hot segments like enterprise hyper-converged infrastructure. EMC also owns about 80 percent of virtualization powerhouse VMware.
    The Dell and EMC channel programs are currently running in parallel. New global channel chief John Byrne has committed to creating a single, integrated program by Feb. 1.

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  34. Khaled haqouq
    Student number:20169053
    Department :Business administration master

    1. Identify five situations when forward integration is a particularly good strategy. Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) are pursuing a forward integration strategy by establishing websites to sell their products directly to consumers. Again, illustrate your answer with examples.

    When an organization’s present distributors are especially expensive
    When the availability of quality distributors is so limited as to offer a competitive advantage
    When an organization competes in an industry that is growing
    When an organization has both capital and human resources to manage distributing their own products
    When the advantages of stable production are particularly high
    When present distributors or retailers have high profit margins How do you do what you do better than anyone else? Knowledge shares can be anything from YouTube tutorials to webinars, to speaking at local conferences. You could repurpose your presentations and put them on your blog!

    2_What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.
    1: Survey, Listen, Learn

    Look for feedback, because the best companies are constantly improving. After completing a service, ask your customer to comment on their experience. Offer a discount to email subscribers who complete a survey, or have printed surveys and pens on hand at your store—if you’re fancy, have a customer complete a survey on her phone or tablet to get a discount before purchasing. The feedback is great in two part; it can inform on your business’ best practices and result in some handy testimonials, and highlight the areas that need improvement.

    2: Pay to Play

    As I learned with my first lemonade stand, you have to spend money to earn money. Online marketing is the same way—if you want to make a positive impact, you are going to have to spend some of your budget on paid search ads, display ads, social ads, etc. It can be intimidating. Especially when your head is spinning with questions; how to get started, how much it costs, how to know if Facebook Ads or AdWords even work. Whether you tackle this yourself or hire someone else to help, it can be so worth it!
    Why do I need to pay for Facebook Ads, you ask? Due to some Facebook trickery, unpaid views on Facebook posts may be as low as 1% of your audience.

    3: Capitalize on Google’s Local Offerings

    As the most widely used search engine, Google has a surplus of offerings that can help your small business. As part of an initiative that started in 2015, Google ran Let’s Put Our Cities on the Map in order to get local businesses online. According to BCG Report, The Connected World, businesses that have an online presence grow 40% faster than those that don’t. If you missed the boat, now is time to hop on the bandwagon!
    By creating a Google My Business account, you can take control of the information about your business, such as hours of operation, address, phone number and website. Now, with the new local search ads, your business can appear on the Google Maps app or website.

    3_List three industries where cooperation among competitors is most likely and explain why.

    1_Pharmaceutical industries the earliest push for data sharing came from the European Medicines Agency (EMA), which in 2012 committed to complete transparency regarding patient level clinical data and study results. In 2014, the EMA announced that it would publish the clinical study reports contained in most all applications for marketing authorizations submitted after Jan. 1, 2015.

    2_ CF Industries Holdings, Inc. is a North American manufacturer and distributor of agricultural fertilizers, based in Deerfield, Illinois, a suburb of Chicago. It was founded in 1946 as the Central Farmers Fertilizer Company. For its first 56 years, it was a federation of regional agricultural supply cooperatives. CF then demutualized, and became a publicly traded company.

    3_In the airline industry, including the question whether the electronic exchange of fare information by airlines –in particular, advance announcements of price increases –is practice that facilitates an electronic negotiating process resulting in an litigation erupted when news of the government investigation appeared in the press2
    In consideration this practice as well as the border issue of communications within the airline industry ,it is important to begin by reviewing the unique characteristics of the airline industry that distinguish it from many other industries .
    First, airlines sell other airlines tickets .Although less common than it used to be ,airlines still offer to sell their competitors product –a seat on particular flight-typically to complete around-trip at a convenient time or to provide a connection to a city the first airline does not serve .This means airlines must have access to each other’s schedules .fares ,and availability on a current basis .thus, the airline industry has a practice that is highly unusual –competitors selling each other’s products.

    4_Identify three joint ventures that have worked especially well in the past.

    1_Kellogg Company Joins with Wilmar International Limited
    Anticipating China’s rise to the top of the food and beverage global market, Kellogg Company entered into a joint venture agreement with Wilmar International Limited for the purpose of selling and distributing cereal and snack foods to consumers in China. While Kellogg brings to the table an extensive collection of globally renowned products as well as their expertise in the industry, Wilmar offers marketing and sales infrastructure in China, including an extensive distribution network and supply chain. Joining together allows both companies to profit from a synergistic relationship. Anticipating

    2_Microsoft and GE Joint Venture, Caradigm

    In December, 2011, Microsoft Corporation and General Electric formed a joint venture which is a health IT company of its own kind. Their common objective was to improve patient experience and the economics of health and wellness through providing the health systems with required systemwide data and intelligence. The joint venture, known as Caradigm, aims at combining technology and clinical applications to transform it into intelligence which is usable by care providers. The name Caradigm evolved from ‘care’ and ‘paradigm,’ because Microsoft and GE intended a paradigm shift in the care delivery system.

    3_Coca-Cola + Heinz In 2009,
    The Coca-Cola Company created the PlantBottleTM, a plastic (PET) bottle partially manufactured (30%) with plant-derived materials (like sugar cane and molasses) and byproducts of sugar production in Brazil. These plants were chosen based on environmental criteria to ensure that they do not interfere with local crops. The remaining 70% of each bottle is made with materials derived from fossil fuels, such as petroleum. The Coca-Cola Company is now striving to manufacture a bottle made of 100% plant-derived materials and plant residues. In fact, they have already developed a prototype, and are now collaborating with Heinz to use their bottling factory. The Coca-Cola Company has planned to invest $150 million in PlantBottleTM, to develop the next generation of technology for extracting sugar from plant residues such as plant stems, tree bark and fruit peel. It is also working to make the new container water and carbon neutral. Heinz has made a major investment in the project, although the company has revealed any details. It is hoping to take a step further towards its own goal of reducing emissions, waste and energy consumption by 20% by 2015. At the time of publication, Heinz had already used 120 million PlantBottlesTM in the USA in 2011. The material in these new containers shares many properties with that of the original plastic (PET): it is amenable to carbonation of the liquid contained; recyclable; weighs the same; has the same life-time; shares the same appearance and chemical composition; and is suitable for water, juice and carbonated beverages. Use of PlantBottleTM can reduce carbon-footprints by 12% to 19%. The bottle is 100% recyclable: the resulting byproducts can be re-used to manufacture more bottles, or to make other products, such as furniture or clothing.

    5_List four important reasons why many mergers and acquisitions fail.
    I think the most common causes behind the fact that the majority of company integrations fail.
    1_Ignorance while the parties to a merger or acquisition cannot exchange commercially sensitive information prior to being under common ownership, there is enough crucially important and legally permissible preparation work to keep an integration team busy for several months before day one. Most chief executives don’t know this and they waste the time that could be put to good use while they await clearance from the regulatory authorities. Good preparation means the integration can kick off on day one.
    2_No common vision In the absence of a clear statement of what the merged company will stand for, how the organization will operate, what it will feel like, and what will be different compared to how things are today, there is no point of the convergence on the horizon and the organizations will never blend.
    3_Team resourcing Resource requirements are very often underestimated. It can take two or three months to release the best players from daily business to join the integration team(s), find a backfill for them, sign up contractors to fill the gaps and set up the team’s infrastructure. Most companies start too late and are not ready on once the deal is completed.
    4_Poor governance Lack of clarity as to who decides what, and no clear issue resolution process. Integrating organizations brings up a myriad of issues that need fast resolution or else the project comes to a stand-still. Again: speed matters, but with a sound decision-making process.
    There are also reasons for failure:
    Integration difficulties
    Large or extraordinary debt
    Too much diversification

    6_Give a hypothetical example of related diversification and an example of unrelated diversification for Google.
    A diversification analysis needs to demonstrate, and support, that the business will achieve a return on the investment that more than compensates for the risk and the cost. A business owner needs to consider efficient diversification strategies to build a competitive advantage, to achieve economies of scale or scope, and/or to take advantage of a financial opportunity that aligns with the business’ strategic plan. Diversification can be segmented into related diversification or unrelated diversification.
    What is Related Diversification?
    It is when a business adds or expands its existing product lines or markets. For example, a phone company that adds or expands its wireless products and services by purchasing another wireless company is engaging in related diversification.
    With a related diversification strategy you have the advantage of understanding the business and of knowing what the industry opportunities and threats are; yet a number of related acquisitions fail to provide the benefits or returns originally predicted. Why? It is usually because the diversification analysis under-estimates the cost of some of the softer issues: change management, integrating two cultures, handling employees. Layoffs and terminations, promotions, and even recruitment. And on the other side, the diversification analysis might over-estimate the benefits to be gained in synergies.
    What is Unrelated Diversification?
    It is when a business adds new, or unrelated, product lines or markets. For example, the same phone company might decide to go into the television business or into the radio business. This is unrelated diversification: there is no direct fit with the existing business.
    Why would a company want to engage in unrelated diversification? Because there may be cost efficiencies. Or the acquisition might provide an offsetting cash flow during a seasonal lull. The driver for this acquisition decision is profit; it needs to be a low risk investment, with high potential for return.
    Google must think

    7_When would market development generally be the preferred strategy over backward or forward integration?
    Strategies for vertical integration
    Vertical integration is a growth strategy that involves expanding the current business of the organization in two possible directions:
    If work is integrated by moving to an area that acts as a supplier, a process is referred to as underdevelopment. In internal integration to the back, the company creates its own sources of supply, perhaps by establishing a subsidiary. The external approach involves the purchase or purchase of an existing resource.
    If the business is integrated by cutting in an area that acts as a customer or user for its products or services, the process is referred to as integration forward. The company can achieve integration internally internally by establishing its own production facility (if it is a supplier of raw materials), sales force, wholesale system or retail outlets. External integration can be achieved through the acquisition of companies that currently perform the required function.
    The reasons for choosing a vertical integration strategy are more varied and sometimes less obvious. If the company believes they pay more for the materials it would cost to produce their own, the temptation to merge vertically is great. Gravity is still greater if getting materials from the supplier on time or problem is expected to become a problem.
    Therefore, the main reason for backward integration is the desire to increase reliance on the supply or quality of raw materials or production inputs.
    The rationale for frontal vertical integration is similar: cost and effectiveness. Greater control over marketing and close coordination between distribution channels and manufacturing would improve sales.
    Integration forward is a preferred strategy if the advantages of stable production are particularly high.
    However, vertical integration requires both forward and backward investment to generate a proportional return.
    In particular, vertical backward integration in raw materials and basic materials may require massive investment. The process may have to reach a level of output that allows economies of scale or otherwise economically.
    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.

    • One of The biggest deals refers to Vodafone Air touch’s acquisition of Mannesmann. Vodafone Group is the current name of the acquirer.
    • SBC Communications acquisition of Ameritech. The acquirer is now known as AT&T.
    • Comcast acquires AT&T Broadband from AT&T.
    Behind the merger and acquisition activities and how they add value to the firms.
    Six factors that lead to successful mergers. These factors are: proper initial synergy evaluation, well thought out integration project planning, due diligence, gathering a capable management team, resolving cultural issues and most importantly, good and transparent communications.

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  35. Mohammed Bayer
    20168900
    Master of banking and accounting
    When organization present distributors are especially expensive
    When the availability of quality distributors is so limited as to offer a competitive advantage
    When an organization competes in an industry that is growing
    When the advantage of stable production are particularly high
    The goal of forward integration is for a company to move forward in the supply chain, increasing its overall ownership of the industry. For example, the company Intel supplies Del with intermediate goods – its processors – that are placed within Del’s hardware. If Intel wanted to move forward in the supply chain, it could conduct a merger or acquisition of Del in order to own the manufacturing portion of the industry.

    Q:2
    Market segmentation enables a small business to compete with larg business by maximizing their profit. For example: Lebanese’s Shwarma in Cyprus.
    Pricing strategy the cost of a sandwitch shwarma must be like any price of a sandwich like Doner or Tawouk.
    Location: the restaurant must in a city and offers deliver and cover big area.
    Q3:
    Toshiba- Apple- Dell
    Toshiba is in an interesting position when it comes to laptop offerings. On one hand, the company has tied with Asus in some surveys as being one of the most reliable brands around, with. On the other hand, Toshiba has also scored very poorly, due in part just-okay customer service, and product models that haven’t made an effort to stand out from the crowd.
    However, there are signs that Toshiba is increasing laptop quality and focusing even more on durability – they even devoted to talk about the durable chassis and honeycomb reinforcement of their latest models.
    Toshiba’s Portege laptop lines tend to be workhouse-like product lines, more affordable versions of common business laptops. They include the latest features (fingerprint sensors, USB Type-C, etc.), but focus on lower prices than other brands, making them similar to Asus in many ways, only with fewer choices. If you’ve looked at other business-oriented laptops and haven’t found anything in your price range or ideal feature set yet, give Toshiba a try.

    If there’s one thing that nearly everyone agrees on, it’s that Apple laptops are the most reliable of the bunch. When you buy a MacBook, you know what to expect, and that rarely involves failures or returns. Part of this is due to Apple’s solid design philosophy. MacBook’s, Airs, and Pros are consistently growing thinner and more powerful, but the overall design style remains the same. The aluminum frame and tightly packed electronics also likely help reduce damage and failure rates. In fact, Apple’s devices tend to get more reliable with later generations, as design becomes tighter. Removing ports, for example, is not a popular move — but it does decrease what can break.
    It’s also worth noting that Apple does many of the smaller things well. The keyboards are snappy, pleasant to use, and nigh unbreakable under usual circumstances. The battery life of MacBook’s tends to be high, too, and doesn’t suffer from swift performance drop-offs or fluctuation. Displays issues tend to be rare, and in Consumer Reports, Apple beat out nine other laptop brands when it came to needing repairs within the first three years of ownership.
    On the other hand, MacBook’s are a definite blow to your wallet, ranging from $1,000 to $1,800 for the most popular models. That’s a lot of money for the average laptop buyer. Despite the high price, the default warranty lasts only one year, as with other more affordable brands. But for common manufacturing issues, a practice other brands rarely emulate.

    Dell’s work, particularly in the ultra-book field, had yielded an incredible new crop of ultraportable laptops that work great, have powerful specs, and don’t give up the ghost without a fight. If you need a PC for work or school, and want it to last for as long as possible, Dell’s machines are a great choice, especially with their latest XPS models that do a little of everything, and do it anywhere. That includes the latest screen resolutions, connections, and software.
    Another important reason Dell gets such high marks for reliability isn’t because the company’s computers never break–they have a good track record, but not as good as MacBooks–but because Dell’s customer support is easily the best you’ll find outside of Apple. If something goes wrong, a quick customer service call with Dell is more likely to yield a solution, or at least a repair plan, than with other brands. Sometimes the most important factor in reliability isn’t the computer itself, but the company you are dealing with.

    Q4:

    1) nokia and siemens
    2) Folby disk
    3) Jaguar and land rover

    Q5:
    1) Change in the external factors
    2) Management weakness
    3) Ignoring customers and sales
    4) No communication clearly

    Q:6

    Related diversification is when a business adds or expands its existing product lines or markets. For example, Google also have a section for YouTube and Gmail.
    On the other hand, unrelated diversification is when a business adds new, or unrelated, product lines or markets. Unrelated diversification for Google
    On the other hand, unrelated diversification is when a business adds new or unrelated, product lines or markets. Customer and has its own niche. Thus Google follows an unrelated and related diversification strategy. Google search engine, Google+ and Android are all major examples of valued but yet very different products. All three products help fulfill Google’s mission of providing the world’s information in an easier manner (Google Inc, 2010, P. 1)For example, Google have diversified into the automobile industry and have developed a self-driving car. The Google self-driving car project is now Waylon, which stands for a new way forward in mobility. It is a self-driving technology company with a mission to make it safe and easy for people and things to move around.
    Q7: Vertical integration is a growth strategy that involves expanding the current business of the organization in two possible directions:
    If work is integrated by moving to an area that acts as a supplier, a process is referred to as underdevelopment. In internal integration to the back, the company creates its own sources of supply, perhaps by establishing a subsidiary. The external approach involves the purchase or purchase of an existing resource.
    If the business is integrated by cutting in an area that acts as a customer or user for its products or services, the process is referred to as integration forward. The company can achieve integration internally internally by establishing its own production facility (if it is a supplier of raw materials), sales force, wholesale system or retail outlets. External integration can be achieved through the acquisition of companies that currently perform the required function.
    The reasons for choosing a vertical integration strategy are more varied and sometimes less obvious. If the company believes they pay more for the materials it would cost to produce their own, the temptation to merge vertically is great. Gravity is still greater if getting materials from the supplier on time or problem is expected to become a problem.
    Therefore, the main reason for backward integration is the desire to increase reliance on the supply or quality of raw materials or production inputs.
    The rationale for frontal vertical integration is similar: cost and effectiveness. Greater control over marketing and close coordination between distribution channels and manufacturing would improve sales.
    Integration forward is a preferred strategy if the advantages of stable production are particularly high.
    However, vertical integration requires both forward and backward investment to generate a proportional return.
    In particular, vertical backward integration in raw materials and basic materials may require massive investment. The process may have to reach a level of output that allows economies of scale or otherwise economically.
    Q:8
    The examples of technology acquisitions in the past 2 years
    a) Facebook’s acquisition of WhatsApp
    b)HP acquiring Electronic Data Corp
    c)Skype acquired by Microsoft
    d)Microsoft acquired Linked
    This strategy is now popular due to deflated valuations at certain private and public technology companies. Low interest rates that make borrowing to finance deals easier. Corporations with enough cash at hand to purchase other companies. Also there is greater efficiency in organization operations, better working environments and effective decision making processes.

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  36. pelan ghaffoori
    20168719
    marketing
    A1.
    Businesses engage in forward integration either to generate a higher margin from a key input which it owns or produces or to better market its products and increase its profitability.
    The forward integration may be an effective strategy in following five situations:
    1. Existing distributors and retailers are expensive and not able to meet the distribution requirements of the firm.
    2. When there are no quality distributors available which gives competitive edge to the firm over its competitors.
    3. When an organization has resources in terms of human resources to manage and finance to meet the expenses of distribution channels.
    4. When the organization has high production facilities to meet the demand of customers. Forward integration will strengthen organization value chain from production till sales and support of the products.
    5.When the current retailers or distributors have high margin which increase the cost of the product and will result in high price of the product. By implementing forward integration company can reduce the cost of distribution and lower the price of the products to increase it sales.
    A2.
    1. Product Differentiation Strategy
Small companies will often use a product differentiation strategy when they have a competitive advantage, such as superior quality or service. For example, a small manufacturer or air purifiers may set themselves apart from competitors with their superior engineering design. Obviously, companies use a product differentiation strategy to set themselves apart from key competitors. However, a product differentiation strategy can also help a company build brand loyalty.
    2. Keeping costs down: All the high-performing companies strove to keep their production budgets low and their prices competitive. However, even when confronted with a sagging economy, they refused to shirk on quality; as a result, most had slightly higher prices than their slumping counterparts, and they attributed their success, in part, to delivering superior goods and services while avoiding price wars.
    3. Customization: Focus involves a restriction of activities to only a part of the market (a segment) through.Providing goods and/ or services at lower cost to that segment.
    A3.
    List three industries where cooperation among competitors is most likely and explain why.
    Airline industry, payment cards and banks are the most known examples.
    By forming alliances Airline industry offers easy connections to almost any destination in the world especially regional ones. Each airline maintains its own individual style and cultural identity, bringing the richness of diversity and multiculturalism to the alliance. At the same time each airline shares a common dedication to the highest standards of safety and customer service. Since for an Airline company it’s impossible to reach all destinations by means of aircraft, pilot and service, it is inevitable to form cooperation.
    Two successful joint ventures, Visa and MasterCard, have designed a set of rules to manage the connection between members. By means of these rules, members may use both of these cards with the same connection. Among the other payment cards it creates preference difference for them.
    People want to access his/her money in the bank without time and place restrictions. Banks form alliance to share ATM/BTM’s with the chosen partners. By means of this alliance people are able to access money by using another bank’s ATM/BTM at anytime and anywhere.
    A4.
    Joint venture is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity. Often, the two or more sponsoring firms form a separate organization and have shared equity ownership in the new entity. Cooperative arrangements include research and development partnerships, cross-distribution agreements, cross-licensing agreements,
    cross-manufacturing agreements, and joint-bidding consortia. Nokia Corp. and Qualcomm recently formed a cooperative agreement to develop next-generation cell phones for North America to hit the market. Joint ventures and cooperative arrangements are being used increasingly because they
    allow companies to improve communications and networking, to globalize operations, and to minimize risk. Joint ventures and partnerships are often used to pursue an opportunity
    that is too complex, uneconomical, or risky for a single firm to pursue alone. Such business creations also are used when achieving and sustaining competitive advantage when an
    industry requires a broader range of competencies and know-how than any one firm can marshal. Strategic partnering takes many forms, including outsourcing, information sharing, joint marketing, and joint research and development.
    A5.
    1.Poor governance Lack of clarity as to who decides what, and no clear issue resolution process. Integrating organisations brings up a myriad of issues that need fast resolution or else the project comes to a stand-still. Again: speed matters, but with a sound decision-making process.
    2.Poor communication Messages too frequently lack relevance to their audience and often hover at the strategic level when what employees want to know is why the organisation is merging, why a merger is the best course action it could take, in what way the company will be better after the merger, how it will “feel”, how the merger will affect their work and what support they will receive if they are adversely impacted.
    3.Poor programme management Insufficiently detailed implementation plans and failure to identify key interdependencies between the many workstreams brings the project to a halt, or requires costly rework, extends the integration timeline and causes frustration.
    4.Ignorance While the parties to a merger or acquisition cannot exchange commercially sensitive information prior to being under common ownership
    A6.
    Related diver diversification :for example when a mobile company expands :is score by buying on other wireless company in the some filed .
    2-we related divers fail :for example when a mobile company decides to go to a different business, like television or radio business.
    A7.
    Market development over backward integration can involve a purchase of suppliers in order to reduce supplier dependency with regard to e.g. timely deliveries, quality concerns, innovation ability etc.
    On the other hand market development over Forward integration
    might be required, if companies would potentially benefit from handling e.g. the shipping of own products directly to customers, or the retail selling of own brands in brand stores.
    A8.
    In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.
    a) Dell Inc. acquired EMC in 2016
    b) Microsoft acquired LinkedIn in June 2016
    c) Avago Technologies acquires Broadcom in 2015
    d) Oracle acquired DNS provider Dyn in January 2017
    Technology acquisition has become popular because everything is all about technology nowadays so companies want to gain the competitive advantage in that it has made life so much easier in the workplace and also organization needs to be up to date when it comes to technology.

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  37. Abdullah ALsawadi
    20159197
    MBA

    1. Identify five situations when forward integration is a particularly good strategy and illustrate your answer with examples. Forward integration is the acquisition of properties or services that bring a company near the customer for example if Dell buys Computech acquisition of a distributor by a manufacturer. Thus business is nearer to the end use who is the consumers, giving the company better control in the marketplace. 5 situations when forward integration is a particularly good strategy:

    a) Pricing is an issue, when retailers or distributors put high mark up this increases the cost of the product. Forward integration means company can reduce the cost of distribution and lower the price of the products to increase its sales. For example, LG (Television) buying its distributors as a way to control the price of their products so as to vie with Samsung and Sony.

    b) Current distributors and retailers are costly and may not be capable to meet the distribution supplies of the firm. For instance, KOOP may acquire trucks to move its stocks as a way of reducing the hustle of supermarkets going direct to the company to purchase products.

    c) When a company has excess resources such as capital and human resources to manage and finance to meet the expenses of distribution channels. For example, Near East Bank acquired Fuel Service station because it had more money in the reserve section and had enough employees who could manage the acquired service.

    d) When there are no reputable distributors available this gives competitive edge to the organization over its competitors. For example, America College opting to in GAU (Girne American University) North Cyprus because there is unavailability of well ranked universities within the country. d) When the organization has high production facilities to meet the demand of customers. Forward integration will strengthen organization value chain from production till sales and support of the products. Like Cyprus International University placing Lemar within school campus to increase distribution of their products due to proximity to students.

    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.

    The three strategies used by small business are market penetration, horizontal integration and related diversification.

    Market Penetration Market penetration is a way for a business to give rise to its profits by making use of its standing skills, capability, and knowledge about its target markets. It is a popular strategy for small businesses. The act of increasing the market share of an existing product, or promoting a new product, through strategies such as bundling, advertising, reduced prices, or volume discounts. Example, a cloth manufacturer might use penetration pricing strategy to lure customers from current competitors and to discourage new competitors from entering the industry. If cloth price is low enough consumers will flock to the new product. Competitors who can’t produce and promote the cloth for such a small profit will avoid the market freeing the cloth company to maximize brand recognition and goodwill.

    Horizontal Integration Horizontal integration is defined as the merging of two or more entities at the same point in the production process in the same or different industries. Expanding sideways at the point(s) in the value chain that the company is currently engaged in. For example, biscuits manufacturers Ulker may decide to form a joint venture with Walkers as a way to increase their market share in North Cyprus.

    Related Diversification This is the addition of new but related products or services in the market. When a company expands into a related industry, one having interaction with the company’s existing lines of business, creating a situation in which the existing and new lines of business share and gain special advantages from cohesions such as technology, customers, distribution, location, product or manufacturing similarities, and government access. For instance, a car wash at a Gas station.

    3. List three industries where cooperation among competitors is most likely and explain why.

    Computer Hardware & Software Industry Computer manufacturers are increasingly working with their competitors on technical projects and development alliances. For instance, HP merged with Compaq in 2002, acquired EDS in 2008 which led to combined revenues of $118.4billion in 2008.

    • Cost-Sharing – in research and development, servers and software engineering • Bulk Buying – consumables and related products

    Mobile Telecommunications Industry • Achieve a better network – mobile companies may want to achieve a better network reach and also generate additional revenue. A “tactical” or a “strategic” alliance. They may also seek to minimize risk exposure, and diversification in creating information technology projects.

    • Reduced competition – Rivalry is reduced and resources are combined for more benefits. In North Cyprus there is only Telsim and Turkcell which means greater market share for the existing 2 companies.

    Fast-moving consumer goods (FMCG) Industry These are goods that are sold quickly at a relatively low cost. FMCG have a short shelf life. Examples include non-durable goods such as soft drinks, toiletries, processed foods and many other consumables.

    • High turnover rates – goods are sold fast hence realizing profits soon

    • Combining purchasing power to source and purchase of raw materials. • Using and sharing excess manufacturing capacity. alcohol and soft drinks as production is almost similar • Using a robust research department to further develop a product first developed by a potential

    partner. Example cosmetics and cleaning products

    4. Identify three joint ventures that have worked especially well in the past. • Kellogg and Wilmar International due to rise in food and beverage global market in China Kellogg entered into a joint venture with Wilmar International for the purpose of selling and distributing cereal and snack foods to consumers in China. While Kellogg brings to the table extensive collection of globally renowned products as well as their expertise in the industry, Wilmar offers marketing and sales infrastructure in China including an extensive distribution network and supply chain. Joining together allows both companies to profit from a synergistic relationship.

    • Hulu The 2008 joint venture launched by NBC Universal Television Group(Comcast), Fox Broadcasting Company and The Walt Disney Company to create the popular video streaming website “Hulu.” Individually the companies are competitors over the US airwaves, combining their efforts to provide streaming content to billions of homes, computers and mobile devices proved a powerful way to increase revenues.

    • The Hisun-Pfizer Joint Venture

    The world’s largest drug company Pfizer and a Chinese pharmaceutical company, Zhejiang Hisun formed a joint company known as Hisun-Pfizer joint venture with a registered capital of US$250million.

    5. List four important reasons why many mergers and acquisitions fail. • Strain in cultural integration • Exaggerated Collaborations • Regulatory Concerns • Unfortunate Business Fit

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google. • Related diversification for Google – Google may introduce a standalone GPS to compliment Google map database. • Unrelated diversification for Google Google may start manufacturing shoes and make online sales and marketing to its standing customers.

    7. When would market development generally be the preferred strategy over backward or forward integration?

    * Effective Costing – Market development emphasizes on selling the same product to a new, growing customer base. Its entering new markets with the same base therefore it is cheaper as compared to backward or forward integration which is expensive as companies must invest large sums of set up costs or procurement.

    * Product Failure – It is beneficial to use market development when the company wants to reduce the risk of product failure. When a product reaches maturity, market development increases sales which is preferable than incorporating another company.

    * Attention – during Market development focus is put on the matter of finding the best ways to attract customers with the same products in order to have new customer base and increase revenue. Whereas with backward or forward integration, it with be difficult to find a multitasking individual to control the joint businesses.

    * No conflict of interest Backward and forward integration involve the integration of two or more businesses hence there can be conflict of interest however with market development, the business will remain the sole controller of its operations hence it would be preferred.

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.

    Facebook buys WhatsApp (2014) The multibillion-dollar Facebook acquisition of the mobile messaging service WhatsApp was the largest deal ever for a venture capital-backed company. The social media company expanded its messaging capabilities with this purchase. WhatsApp has very low costs, so it should eventually be wildly profitable this is a reason why it is popularly used by customers of all walks of life.

    Dell Inc. buys EMC (2015)

    The value was based on the ‘special stock’ included in the deal that tracks the share price in virtual software provider VMWare Inc. which was owned by EMC Microsoft Acquired LinkedIn (2016) Microsoft bought one of the world’s most powerful, specialized, highly read, constantly-updated digital media companies. The acquisition was prevalent in that Linkedin could be rooted with Skype, an email system and other enterprise products so that it could be able to recreate the connective tissue for enterprises.

    Avago Technologies agrees to buy Broadcom (2015) Avago Technologies announced it would buy rival chipmaker Broadcom. The combined company now based in Singapore is the 3rd largest US semiconductor-maker by revenue behind Intel Corp and Qualcomm.

    Like

  38. 1. Identify five situations when forward integration is a particularly good strategy and illustrate your answer with examples. Forward integration is the acquisition of properties or services that bring a company near the customer for example if Dell buys Computech acquisition of a distributor by a manufacturer. Thus business is nearer to the end use who is the consumers, giving the company better control in the marketplace. 5 situations when forward integration is a particularly good strategy:

    a) Pricing is an issue, when retailers or distributors put high mark up this increases the cost of the product. Forward integration means company can reduce the cost of distribution and lower the price of the products to increase its sales. For example, LG (Television) buying its distributors as a way to control the price of their products so as to vie with Samsung and Sony.

    b) Current distributors and retailers are costly and may not be capable to meet the distribution supplies of the firm. For instance, KOOP may acquire trucks to move its stocks as a way of reducing the hustle of supermarkets going direct to the company to purchase products.

    c) When a company has excess resources such as capital and human resources to manage and finance to meet the expenses of distribution channels. For example, Near East Bank acquired Fuel Service station because it had more money in the reserve section and had enough employees who could manage the acquired service.

    d) When there are no reputable distributors available this gives competitive edge to the organization over its competitors. For example, America College opting to in GAU (Girne American University) North Cyprus because there is unavailability of well ranked universities within the country. d) When the organization has high production facilities to meet the demand of customers. Forward integration will strengthen organization value chain from production till sales and support of the products. Like Cyprus International University placing Lemar within school campus to increase distribution of their products due to proximity to students.

    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.

    The three strategies used by small business are market penetration, horizontal integration and related diversification.

    Market Penetration Market penetration is a way for a business to give rise to its profits by making use of its standing skills, capability, and knowledge about its target markets. It is a popular strategy for small businesses. The act of increasing the market share of an existing product, or promoting a new product, through strategies such as bundling, advertising, reduced prices, or volume discounts. Example, a cloth manufacturer might use penetration pricing strategy to lure customers from current competitors and to discourage new competitors from entering the industry. If cloth price is low enough consumers will flock to the new product. Competitors who can’t produce and promote the cloth for such a small profit will avoid the market freeing the cloth company to maximize brand recognition and goodwill.

    Horizontal Integration Horizontal integration is defined as the merging of two or more entities at the same point in the production process in the same or different industries. Expanding sideways at the point(s) in the value chain that the company is currently engaged in. For example, biscuits manufacturers Ulker may decide to form a joint venture with Walkers as a way to increase their market share in North Cyprus.

    Related Diversification This is the addition of new but related products or services in the market. When a company expands into a related industry, one having interaction with the company’s existing lines of business, creating a situation in which the existing and new lines of business share and gain special advantages from cohesions such as technology, customers, distribution, location, product or manufacturing similarities, and government access. For instance, a car wash at a Gas station.

    3. List three industries where cooperation among competitors is most likely and explain why.

    Computer Hardware & Software Industry Computer manufacturers are increasingly working with their competitors on technical projects and development alliances. For instance, HP merged with Compaq in 2002, acquired EDS in 2008 which led to combined revenues of $118.4billion in 2008.

    • Cost-Sharing – in research and development, servers and software engineering • Bulk Buying – consumables and related products

    Mobile Telecommunications Industry • Achieve a better network – mobile companies may want to achieve a better network reach and also generate additional revenue. A “tactical” or a “strategic” alliance. They may also seek to minimize risk exposure, and diversification in creating information technology projects.

    • Reduced competition – Rivalry is reduced and resources are combined for more benefits. In North Cyprus there is only Telsim and Turkcell which means greater market share for the existing 2 companies.

    Fast-moving consumer goods (FMCG) Industry These are goods that are sold quickly at a relatively low cost. FMCG have a short shelf life. Examples include non-durable goods such as soft drinks, toiletries, processed foods and many other consumables.

    • High turnover rates – goods are sold fast hence realizing profits soon

    • Combining purchasing power to source and purchase of raw materials. • Using and sharing excess manufacturing capacity. alcohol and soft drinks as production is almost similar • Using a robust research department to further develop a product first developed by a potential

    partner. Example cosmetics and cleaning products

    4. Identify three joint ventures that have worked especially well in the past. • Kellogg and Wilmar International due to rise in food and beverage global market in China Kellogg entered into a joint venture with Wilmar International for the purpose of selling and distributing cereal and snack foods to consumers in China. While Kellogg brings to the table extensive collection of globally renowned products as well as their expertise in the industry, Wilmar offers marketing and sales infrastructure in China including an extensive distribution network and supply chain. Joining together allows both companies to profit from a synergistic relationship.

    • Hulu The 2008 joint venture launched by NBC Universal Television Group(Comcast), Fox Broadcasting Company and The Walt Disney Company to create the popular video streaming website “Hulu.” Individually the companies are competitors over the US airwaves, combining their efforts to provide streaming content to billions of homes, computers and mobile devices proved a powerful way to increase revenues.

    • The Hisun-Pfizer Joint Venture

    The world’s largest drug company Pfizer and a Chinese pharmaceutical company, Zhejiang Hisun formed a joint company known as Hisun-Pfizer joint venture with a registered capital of US$250million.

    5. List four important reasons why many mergers and acquisitions fail. • Strain in cultural integration • Exaggerated Collaborations • Regulatory Concerns • Unfortunate Business Fit

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google. • Related diversification for Google – Google may introduce a standalone GPS to compliment Google map database. • Unrelated diversification for Google Google may start manufacturing shoes and make online sales and marketing to its standing customers.

    7. When would market development generally be the preferred strategy over backward or forward integration?

    * Effective Costing – Market development emphasizes on selling the same product to a new, growing customer base. Its entering new markets with the same base therefore it is cheaper as compared to backward or forward integration which is expensive as companies must invest large sums of set up costs or procurement.

    * Product Failure – It is beneficial to use market development when the company wants to reduce the risk of product failure. When a product reaches maturity, market development increases sales which is preferable than incorporating another company.

    * Attention – during Market development focus is put on the matter of finding the best ways to attract customers with the same products in order to have new customer base and increase revenue. Whereas with backward or forward integration, it with be difficult to find a multitasking individual to control the joint businesses.

    * No conflict of interest Backward and forward integration involve the integration of two or more businesses hence there can be conflict of interest however with market development, the business will remain the sole controller of its operations hence it would be preferred.

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.

    Facebook buys WhatsApp (2014) The multibillion-dollar Facebook acquisition of the mobile messaging service WhatsApp was the largest deal ever for a venture capital-backed company. The social media company expanded its messaging capabilities with this purchase. WhatsApp has very low costs, so it should eventually be wildly profitable this is a reason why it is popularly used by customers of all walks of life.

    Dell Inc. buys EMC (2015)

    The value was based on the ‘special stock’ included in the deal that tracks the share price in virtual software provider VMWare Inc. which was owned by EMC Microsoft Acquired LinkedIn (2016) Microsoft bought one of the world’s most powerful, specialized, highly read, constantly-updated digital media companies. The acquisition was prevalent in that Linkedin could be rooted with Skype, an email system and other enterprise products so that it could be able to recreate the connective tissue for enterprises.

    Avago Technologies agrees to buy Broadcom (2015) Avago Technologies announced it would buy rival chipmaker Broadcom. The combined company now based in Singapore is the 3rd largest US semiconductor-maker by revenue behind Intel Corp and Qualcomm.

    Like

  39. Abdullah ALsawadi
    20159197
    MBA

    1. Identify five situations when forward integration is a particularly good strategy and illustrate your answer with examples. Forward integration is the acquisition of properties or services that bring a company near the customer for example if Dell buys Computech acquisition of a distributor by a manufacturer. Thus business is nearer to the end use who is the consumers, giving the company better control in the marketplace. 5 situations when forward integration is a particularly good strategy:

    a) Pricing is an issue, when retailers or distributors put high mark up this increases the cost of the product. Forward integration means company can reduce the cost of distribution and lower the price of the products to increase its sales. For example, LG (Television) buying its distributors as a way to control the price of their products so as to vie with Samsung and Sony.

    b) Current distributors and retailers are costly and may not be capable to meet the distribution supplies of the firm. For instance, KOOP may acquire trucks to move its stocks as a way of reducing the hustle of supermarkets going direct to the company to purchase products.

    c) When a company has excess resources such as capital and human resources to manage and finance to meet the expenses of distribution channels. For example, Near East Bank acquired Fuel Service station because it had more money in the reserve section and had enough employees who could manage the acquired service.

    d) When there are no reputable distributors available this gives competitive edge to the organization over its competitors. For example, America College opting to in GAU (Girne American University) North Cyprus because there is unavailability of well ranked universities within the country. d) When the organization has high production facilities to meet the demand of customers. Forward integration will strengthen organization value chain from production till sales and support of the products. Like Cyprus International University placing Lemar within school campus to increase distribution of their products due to proximity to students.

    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.

    The three strategies used by small business are market penetration, horizontal integration and related diversification.

    Market Penetration Market penetration is a way for a business to give rise to its profits by making use of its standing skills, capability, and knowledge about its target markets. It is a popular strategy for small businesses. The act of increasing the market share of an existing product, or promoting a new product, through strategies such as bundling, advertising, reduced prices, or volume discounts. Example, a cloth manufacturer might use penetration pricing strategy to lure customers from current competitors and to discourage new competitors from entering the industry. If cloth price is low enough consumers will flock to the new product. Competitors who can’t produce and promote the cloth for such a small profit will avoid the market freeing the cloth company to maximize brand recognition and goodwill.

    Horizontal Integration Horizontal integration is defined as the merging of two or more entities at the same point in the production process in the same or different industries. Expanding sideways at the point(s) in the value chain that the company is currently engaged in. For example, biscuits manufacturers Ulker may decide to form a joint venture with Walkers as a way to increase their market share in North Cyprus.

    Related Diversification This is the addition of new but related products or services in the market. When a company expands into a related industry, one having interaction with the company’s existing lines of business, creating a situation in which the existing and new lines of business share and gain special advantages from cohesions such as technology, customers, distribution, location, product or manufacturing similarities, and government access. For instance, a car wash at a Gas station.

    3. List three industries where cooperation among competitors is most likely and explain why.

    Computer Hardware & Software Industry Computer manufacturers are increasingly working with their competitors on technical projects and development alliances. For instance, HP merged with Compaq in 2002, acquired EDS in 2008 which led to combined revenues of $118.4billion in 2008.

    • Cost-Sharing – in research and development, servers and software engineering • Bulk Buying – consumables and related products

    Mobile Telecommunications Industry • Achieve a better network – mobile companies may want to achieve a better network reach and also generate additional revenue. A “tactical” or a “strategic” alliance. They may also seek to minimize risk exposure, and diversification in creating information technology projects.

    • Reduced competition – Rivalry is reduced and resources are combined for more benefits. In North Cyprus there is only Telsim and Turkcell which means greater market share for the existing 2 companies.

    Fast-moving consumer goods (FMCG) Industry These are goods that are sold quickly at a relatively low cost. FMCG have a short shelf life. Examples include non-durable goods such as soft drinks, toiletries, processed foods and many other consumables.

    • High turnover rates – goods are sold fast hence realizing profits soon

    • Combining purchasing power to source and purchase of raw materials. • Using and sharing excess manufacturing capacity. alcohol and soft drinks as production is almost similar • Using a robust research department to further develop a product first developed by a potential

    partner. Example cosmetics and cleaning products

    4. Identify three joint ventures that have worked especially well in the past. • Kellogg and Wilmar International due to rise in food and beverage global market in China Kellogg entered into a joint venture with Wilmar International for the purpose of selling and distributing cereal and snack foods to consumers in China. While Kellogg brings to the table extensive collection of globally renowned products as well as their expertise in the industry, Wilmar offers marketing and sales infrastructure in China including an extensive distribution network and supply chain. Joining together allows both companies to profit from a synergistic relationship.

    • Hulu The 2008 joint venture launched by NBC Universal Television Group(Comcast), Fox Broadcasting Company and The Walt Disney Company to create the popular video streaming website “Hulu.” Individually the companies are competitors over the US airwaves, combining their efforts to provide streaming content to billions of homes, computers and mobile devices proved a powerful way to increase revenues.

    • The Hisun-Pfizer Joint Venture

    The world’s largest drug company Pfizer and a Chinese pharmaceutical company, Zhejiang Hisun formed a joint company known as Hisun-Pfizer joint venture with a registered capital of US$250million.

    5. List four important reasons why many mergers and acquisitions fail. • Strain in cultural integration • Exaggerated Collaborations • Regulatory Concerns • Unfortunate Business Fit

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google. • Related diversification for Google – Google may introduce a standalone GPS to compliment Google map database. • Unrelated diversification for Google Google may start manufacturing shoes and make online sales and marketing to its standing customers.

    7. When would market development generally be the preferred strategy over backward or forward integration?

    * Effective Costing – Market development emphasizes on selling the same product to a new, growing customer base. Its entering new markets with the same base therefore it is cheaper as compared to backward or forward integration which is expensive as companies must invest large sums of set up costs or procurement.

    * Product Failure – It is beneficial to use market development when the company wants to reduce the risk of product failure. When a product reaches maturity, market development increases sales which is preferable than incorporating another company.

    * Attention – during Market development focus is put on the matter of finding the best ways to attract customers with the same products in order to have new customer base and increase revenue. Whereas with backward or forward integration, it with be difficult to find a multitasking individual to control the joint businesses.

    * No conflict of interest Backward and forward integration involve the integration of two or more businesses hence there can be conflict of interest however with market development, the business will remain the sole controller of its operations hence it would be preferred.

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.

    Facebook buys WhatsApp (2014) The multibillion-dollar Facebook acquisition of the mobile messaging service WhatsApp was the largest deal ever for a venture capital-backed company. The social media company expanded its messaging capabilities with this purchase. WhatsApp has very low costs, so it should eventually be wildly profitable this is a reason why it is popularly used by customers of all walks of life.

    Dell Inc. buys EMC (2015)

    The value was based on the ‘special stock’ included in the deal that tracks the share price in virtual software provider VMWare Inc. which was owned by EMC Microsoft Acquired LinkedIn (2016) Microsoft bought one of the world’s most powerful, specialized, highly read, constantly-updated digital media companies. The acquisition was prevalent in that Linkedin could be rooted with Skype, an email system and other enterprise products so that it could be able to recreate the connective tissue for enterprises.

    Avago Technologies agrees to buy Broadcom (2015) Avago Technologies announced it would buy rival chipmaker Broadcom. The combined company now based in Singapore is the 3rd largest US semiconductor-maker by revenue behind Intel Corp and Qualcomm.

    Like

  40. Abdullah ALsawadi
    20159197
    MBA

    1. Identify five situations when forward integration is a particularly good strategy and illustrate your answer with examples. Forward integration is the acquisition of properties or services that bring a company near the customer for example if Dell buys Computech acquisition of a distributor by a manufacturer. Thus business is nearer to the end use who is the consumers, giving the company better control in the marketplace. 5 situations when forward integration is a particularly good strategy:

    a) Pricing is an issue, when retailers or distributors put high mark up this increases the cost of the product. Forward integration means company can reduce the cost of distribution and lower the price of the products to increase its sales. For example, LG (Television) buying its distributors as a way to control the price of their products so as to vie with Samsung and Sony.

    b) Current distributors and retailers are costly and may not be capable to meet the distribution supplies of the firm. For instance, KOOP may acquire trucks to move its stocks as a way of reducing the hustle of supermarkets going direct to the company to purchase products.

    c) When a company has excess resources such as capital and human resources to manage and finance to meet the expenses of distribution channels. For example, Near East Bank acquired Fuel Service station because it had more money in the reserve section and had enough employees who could manage the acquired service.

    d) When there are no reputable distributors available this gives competitive edge to the organization over its competitors. For example, America College opting to in GAU (Girne American University) North Cyprus because there is unavailability of well ranked universities within the country. d) When the organization has high production facilities to meet the demand of customers. Forward integration will strengthen organization value chain from production till sales and support of the products. Like Cyprus International University placing Lemar within school campus to increase distribution of their products due to proximity to students.

    2. What three strategies defined do you feel are most widely used by small businesses? Illustrate your answer with examples.

    The three strategies used by small business are market penetration, horizontal integration and related diversification.

    Market Penetration Market penetration is a way for a business to give rise to its profits by making use of its standing skills, capability, and knowledge about its target markets. It is a popular strategy for small businesses. The act of increasing the market share of an existing product, or promoting a new product, through strategies such as bundling, advertising, reduced prices, or volume discounts. Example, a cloth manufacturer might use penetration pricing strategy to lure customers from current competitors and to discourage new competitors from entering the industry. If cloth price is low enough consumers will flock to the new product. Competitors who can’t produce and promote the cloth for such a small profit will avoid the market freeing the cloth company to maximize brand recognition and goodwill.

    Horizontal Integration Horizontal integration is defined as the merging of two or more entities at the same point in the production process in the same or different industries. Expanding sideways at the point(s) in the value chain that the company is currently engaged in. For example, biscuits manufacturers Ulker may decide to form a joint venture with Walkers as a way to increase their market share in North Cyprus.

    Related Diversification This is the addition of new but related products or services in the market. When a company expands into a related industry, one having interaction with the company’s existing lines of business, creating a situation in which the existing and new lines of business share and gain special advantages from cohesions such as technology, customers, distribution, location, product or manufacturing similarities, and government access. For instance, a car wash at a Gas station.

    3. List three industries where cooperation among competitors is most likely and explain why.

    Computer Hardware & Software Industry Computer manufacturers are increasingly working with their competitors on technical projects and development alliances. For instance, HP merged with Compaq in 2002, acquired EDS in 2008 which led to combined revenues of $118.4billion in 2008.

    • Cost-Sharing – in research and development, servers and software engineering • Bulk Buying – consumables and related products

    Mobile Telecommunications Industry • Achieve a better network – mobile companies may want to achieve a better network reach and also generate additional revenue. A “tactical” or a “strategic” alliance. They may also seek to minimize risk exposure, and diversification in creating information technology projects.

    • Reduced competition – Rivalry is reduced and resources are combined for more benefits. In North Cyprus there is only Telsim and Turkcell which means greater market share for the existing 2 companies.

    Fast-moving consumer goods (FMCG) Industry These are goods that are sold quickly at a relatively low cost. FMCG have a short shelf life. Examples include non-durable goods such as soft drinks, toiletries, processed foods and many other consumables.

    • High turnover rates – goods are sold fast hence realizing profits soon

    • Combining purchasing power to source and purchase of raw materials. • Using and sharing excess manufacturing capacity. alcohol and soft drinks as production is almost similar • Using a robust research department to further develop a product first developed by a potential

    partner. Example cosmetics and cleaning products

    4. Identify three joint ventures that have worked especially well in the past. • Kellogg and Wilmar International due to rise in food and beverage global market in China Kellogg entered into a joint venture with Wilmar International for the purpose of selling and distributing cereal and snack foods to consumers in China. While Kellogg brings to the table extensive collection of globally renowned products as well as their expertise in the industry, Wilmar offers marketing and sales infrastructure in China including an extensive distribution network and supply chain. Joining together allows both companies to profit from a synergistic relationship.

    • Hulu The 2008 joint venture launched by NBC Universal Television Group(Comcast), Fox Broadcasting Company and The Walt Disney Company to create the popular video streaming website “Hulu.” Individually the companies are competitors over the US airwaves, combining their efforts to provide streaming content to billions of homes, computers and mobile devices proved a powerful way to increase revenues.

    • The Hisun-Pfizer Joint Venture

    The world’s largest drug company Pfizer and a Chinese pharmaceutical company, Zhejiang Hisun formed a joint company known as Hisun-Pfizer joint venture with a registered capital of US$250million.

    5. List four important reasons why many mergers and acquisitions fail. • Strain in cultural integration • Exaggerated Collaborations • Regulatory Concerns • Unfortunate Business Fit

    6. Give a hypothetical example of related diversification and an example of unrelated diversification for Google. • Related diversification for Google – Google may introduce a standalone GPS to compliment Google map database. • Unrelated diversification for Google Google may start manufacturing shoes and make online sales and marketing to its standing customers.

    7. When would market development generally be the preferred strategy over backward or forward integration?

    * Effective Costing – Market development emphasizes on selling the same product to a new, growing customer base. Its entering new markets with the same base therefore it is cheaper as compared to backward or forward integration which is expensive as companies must invest large sums of set up costs or procurement.

    * Product Failure – It is beneficial to use market development when the company wants to reduce the risk of product failure. When a product reaches maturity, market development increases sales which is preferable than incorporating another company.

    * Attention – during Market development focus is put on the matter of finding the best ways to attract customers with the same products in order to have new customer base and increase revenue. Whereas with backward or forward integration, it with be difficult to find a multitasking individual to control the joint businesses.

    * No conflict of interest Backward and forward integration involve the integration of two or more businesses hence there can be conflict of interest however with market development, the business will remain the sole controller of its operations hence it would be preferred.

    8. In new technology, the current trend is for acquisitions rather than mergers. Give 4 examples of technology acquisitions in the past 2 years and explain why this strategy is now popular.

    Facebook buys WhatsApp (2014) The multibillion-dollar Facebook acquisition of the mobile messaging service WhatsApp was the largest deal ever for a venture capital-backed company. The social media company expanded its messaging capabilities with this purchase. WhatsApp has very low costs, so it should eventually be wildly profitable this is a reason why it is popularly used by customers of all walks of life.

    Dell Inc. buys EMC (2015)

    The value was based on the ‘special stock’ included in the deal that tracks the share price in virtual software provider VMWare Inc. which was owned by EMC Microsoft Acquired LinkedIn (2016) Microsoft bought one of the world’s most powerful, specialized, highly read, constantly-updated digital media companies. The acquisition was prevalent in that Linkedin could be rooted with Skype, an email system and other enterprise products so that it could be able to recreate the connective tissue for enterprises.

    Avago Technologies agrees to buy Broadcom (2015) Avago Technologies announced it would buy rival chipmaker Broadcom. The combined company now based in Singapore is the 3rd largest US semiconductor-maker by revenue behind Intel Corp and Qualcomm.

    Like

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