I’m working on a business question and need guidance to help me learn.

Please respond to each student 100-150 words.

Discussion Questions

1. From Chapter 7: How does horizontal growth differ from vertical growth as a corporate strategy? From concentric diversification?
2. From Chapter 8: Are functional strategies interdependent, or can they be formulated independently of other functions?

Student 1

1. From Chapter 7: How does horizontal growth differ from vertical growth as a corporate strategy? From concentric diversification?

Horizontal growth indicates rise of the entity volume of the operations to various other markets. It may also happen via acquiring, taking or merging over another business. Domestic mark can be expanded and internationally and being global. Horizontal strategies also do same by increasing lines of the services & goods for generating huge revenue. Addition of new products is being done currently company. And vertical integrity demands performance & assumptions of activities which were initially performed by supplier. This thing saves cost and acquires skills which is not possible via outsourcing. Concentric diversification is used when company introduces new departments, services or products which are in line of their core objective. Concentric growth permits organizations for diversifying their operations by development or acquisition of the new products which differs from their core and achieve entry to untapped markets.

2. From Chapter 8: Are functional strategies interdependent, or can they be formulated independently of other functions?

Despite independent formulation of the functional strategies by various organizations and companies they are independent still. It arises because they meant to the achieve objectives of the organization. Some procedures are designed & coordinated with the other functions. Work is done conjunction with several activities in the line management which fulfils general objectives of company.

Example of functional strategy which relates to another is reduction of cost and should embrace by other departments. They also require skilled and qualified employees by department of human resources and support from training department for sharpening their skills.

Resources

Open Growth. (2020). How To Evaluate Corporate Strategy. https://www.opengrowth.com/article/how-to-evaluate-corporate-strategy (Links to an external site.)

Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic Management and Business Policy (15th Edition). Pearson Education (US). https://mbsdirect.vitalsource.com/books/9780134538…

Student 2

Good morning All:

Unit 5 – Discussion

Chapter 7: How does horizontal growth differ from vertical growth as a corporate strategy? From concentric diversification?

Horizontal and vertical growth differ in how a corporation strategizes its operations for expansion. Think of vertical like a ladder; each rung is a step in the supply chain, starting from a raw material supplier, production, distribution, retail, and finally, the consumer. The vertical growth strategy leads into vertical integration; for example, the production company could move backward or backward integrate and purchase the raw material supplier, ensuring a plentiful source of raw materials to produce its products for distribution. Or the production company could acquire a distribution provider to ensure its products reach retailers or wholesalers. A production firm acquiring a distribution firm is forward integration.

Horizontal growth occurs in a horizontal plane. Think of that same ladder; horizontal integration occurs across the same rung. For example, a corporation could acquire many distribution companies transporting goods and materials from suppliers to retailers. The big takeaway from this is that many firms would have to deal with that corporation that owns the distribution companies to move their product. Those distributors would provide a better price or value over their lesser competitors since they are in a competitive advantage. Eventually, suppose the more prominent company wanted to, could offer to buy smaller distribution companies, or wait until they cannot compete any longer then buy their business, equipment, building, etc.

Concentric diversification occurs when new products or services are introduced into a market by effectively utilizing the company’s assets and resources. A great example of a company that grew through concentric diversification is Amazon. Amazon sold books then introduced music compact discs and movie DVDs for sale. Eventually, Amazon introduced more products to sell within their web-based marketplace. Amazon also adopted a vertical integration strategy by purchasing vehicles to deliver their products and competing with UPS and FedEx (Dans, 2020).

Chapter 8: Are functional strategies interdependent, or can they be formulated independently of other functions?

Functional strategies serve as the objectives to achieve the corporation’s vision of success. So functional strategies are interdependent on the overall goal. Functional strategies are the how; how the objectives of the corporation’s departments will cope together for the achievement of the overall goal. One department’s objective must keep in mind what other departments are planning because it could affect the overall efficiency. Each department – marketing, finance, research & development, operations, and purchasing- has strategies that play within their objectives or do “their part” that assist in achieving the company’s overall goal.

An example is operations determining the manufacturing schedules or locations where products are produced or the marketing department specifying which markets to enter and how (market saturation and market penetration) to promote the company’s products or services. As mentioned at the end of the chapter, “functional strategies must be formulated to support business and corporate strategies; otherwise, the company will move in multiple directions and eventually pull itself apart (Wheelen, 2017).” The success of achieving the company’s overall goals and strategies is for those functional units doing what they do best (competencies) within their teams to align with the overall goals. If each department decides to think independently, their objectives will not align with the overall goals and often tend to become a weakness with its chain.

References

Dans, E. (2020, September 08). Amazon takes vertical integration to a new level. Retrieved from Medium: https://medium.com/enrique-dans/amazon-takes-verti…

Wheelen, T. L., Hunger, J. D., Hoffman, A. N., Bamford, C. E. (20170109). Strategic Management and Business Policy, 15th Edition. [[VitalSource Bookshelf version]]. Retrieved from vbk://9780134538662