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Vertical Integration (Along The Industry Value Chain) Which Is The Integrating of

Strategy formulation is the process of developing strategic objectives and plans, while strategy implementation is executing the determined strategy. There are three levels of strategy: corporate strategy addresses which businesses to compete in, business strategy is how to achieve objectives within a business, and international strategy is which markets to compete in. Outsourcing, offshoring, and international strategy belong to the level of international strategy. Business strategies are based on whether competitive advantage comes from low prices or differentiation, and targeting a broad or narrow market scope. The three dimensions of corporate strategy are vertical integration along the industry value chain, horizontal integration through mergers and acquisitions, and geographic scope or global strategy regarding where a firm competes and locates activities.

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Abby Czonn Fetalino
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154 views2 pages

Vertical Integration (Along The Industry Value Chain) Which Is The Integrating of

Strategy formulation is the process of developing strategic objectives and plans, while strategy implementation is executing the determined strategy. There are three levels of strategy: corporate strategy addresses which businesses to compete in, business strategy is how to achieve objectives within a business, and international strategy is which markets to compete in. Outsourcing, offshoring, and international strategy belong to the level of international strategy. Business strategies are based on whether competitive advantage comes from low prices or differentiation, and targeting a broad or narrow market scope. The three dimensions of corporate strategy are vertical integration along the industry value chain, horizontal integration through mergers and acquisitions, and geographic scope or global strategy regarding where a firm competes and locates activities.

Uploaded by

Abby Czonn Fetalino
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Name: E.J.Mitch C.

Castor BSMA3
ASSIGNMENT
1. What is the difference between strategy formulation and strategy implementation?
What are the different levels of strategy?
Strategy formulation is the process in which the strategic objectives and plans of the
organization are developed, while strategy implementation signifies the process in which
the strategy that has been determined is executed. In other words, decisions are made in
strategy formulation, which is then enforced in strategy implementation.
The three levels of strategy are corporate and business strategy which summarizes
the distinction between business and corporate strategy. The general distinction is that
business strategy addresses how we should compete, while corporate strategy is
concerned with which businesses we should compete with. Specifically, business
strategy refers to how a firm plans to achieve its objectives within a particular business,
and lastly, an International strategy specialized in the sense that corporate strategy guides
the choice of which markets, including different countries, a firm competes in.
2. To what level of strategy do outsourcing, offshoring, and international strategy belong?
On what two dimensions are all business strategies based?
Outsourcing, off-shoring, and international strategy belong to International strategy.
Even when a firm doesn’t sell products or services outside its home country, its
international strategy can include importing, international outsourcing, or off-shoring.
Business-level strategies examine how firms compete in a given industry. Firms derive
such strategies by executives making decisions about whether their source of competitive
advantage is based on price or differentiation and whether their scope of operations
targets a broad or narrow market.
3. What are the three dimensions of corporate strategy and how are they different?
Corporate strategy concerns the scope of the firm along three dimensions: (1)
vertical integration (along the industry value chain) which is the integrating of
successive stages in the production and marketing process under the ownership or control
of a single management organization. (2) horizontal integration which is the merger or
acquisition of new business operations and a corporate strategy in which a company
acquires or establishes a business other than that of its current product, and (3)
geographic scope (global strategy) which is the area over which a firm chooses to
compete and locate its activities.
4. What are the three ways in which geographic diversification can positively affect
financial performance? When should a firm choose the global strategy rather than a
multidomestic strategy?
Choices made concerning these three aspects of diversification have financial
implications in the form of economies of scale or scope. Geographic expansion into new
countries can affect profitability through economies of scale which are the cost
advantages that a business obtains through expanding in size, which is one reason why
companies grow large in certain industries, economies of scope which are similar in
concept to economies of scale, or reduction in costs resulting from less costly inputs. A
firm should choose a global strategy than a multidomestic strategy when a firm wants to
be centralized and controlled by the home office and seeks to maximize global efficiency
rather than maximizing local responsiveness by giving decentralizing decision-making
authority to local business units in each country so that they can create products and
services optimized to their local markets, and when a firm’s products are much more
likely to be standardized rather than tailored to local markets.

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