CORPORATE STRATEGY

The corporate level strategies or Grand strategies are

the general plan by which the organization intends to
achieve its purpose and long term objectives.

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VERTICAL INTEGRATION

It takes place when one firm acquires another firm

which is involved either in an early stage of the
production process (backward or upstream) or a later
stage of the production process (forward or
downstream).

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Backward vertical integration occurs when the
companies acquired the supply the firm with products,
components or raw materials.

Forward integration on the other hand, helps a firm

gain control over sales an prices of its existing
products.

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 COSTS AND BENEFITS OF
VERTICAL INTEGRATION
BENEFITS COSTS

Reduced purchasing and selling costs Improved co-ordination among

functions and capabilities

Protect proprietary technology Reduced flexibility as organization is

closed into products & technology

Difficulties in integrating various Financial costs of acquiring or starting

operations up

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 DIVERSIFICATION
It describes the different business that an organization
is engaged in and the extent to which these businesses
are related to one another. It is said to minimize risk
associated with confining the business to one or very
few products
The company can enter new lines of business to
preempt potential competitors.
It can introduce new products, satisfying a variety of
needs.

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 DIVERSIFICATION

HORIZONTAL VERTICAL

CONCENTRIC VERTICAL FORWARD BACKWARD

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Horizontal Integration takes place when some firms
expand, by acquiring other companies in the same line
of business such acquisitions, eliminate competitors
and provide the acquiring organization access to new
markets.

Concentric diversification; It occurs when an

organization diversifies into a related, but distinct
business. With concentric diversification, the new
businesses can be related to existing businesses
through products, markets or technology.

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Conglomerate diversification; It takes place, when an
organization diversifies into areas that are unrelated to
its current business. The decision to diversify into
unrelated areas, is generally undertaken by firms in
volatile.

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Vertical Integration takes place when one firm
acquires another firm which is involved either in an
early stage of the production process or a later stage of
the production process.
Backward Vertical: It occurs when the companies
acquired supply the firm with production components
or raw materials.
Forward Vetical: It is on the other hand , helps a firm
gain control over sales and pricing of its existing
products.

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 SUMMARY
CORPORATE STRATEGY
VERTICAL INTEGRATION
DIVERSIFICATION

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THANKYOU

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