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∆ Integration Strategies- Integration strategies are processes that businesses can use to enhance their
competitiveness, efficiency or market share by expanding their influence into new areas. These areas
can include supply, distribution or competition.

∆Types of integrations strategies

1. Vertical integration

Vertical integration occurs when a company gains control over the production or distribution processes
of its product. This allows the company to expand its power in the market by lowering its costs and
increasing the reach of its product

∆ A company can pursue this strategy in three primary ways:

∆ 1. Forward Integration- A company pursues forward integration when it gains control over the
distribution of its finished product.

∆ Guidelines in which forward integration strategy can be use effectively

∆ ( animation: isa isa) 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

6. When present distributors or retailers have high profit margins

∆ 2. Backward Integration - it occurs when a business gains control over its product's supply chain by
integrating with its suppliers or by producing intermediate goods for itself.

∆ ( isa isa) Guidelines in which backward integration strategy can be use effectively

1. When an organization’s present suppliers are especially expensive, unreliable, or incapable of meeting
the firm’s needs for parts, components, assemblies, or raw materials.

2. When the number of suppliers is small and the number of competitors is large.

3. When an organization competes in an industry that is growing rapidly

4. When an organization has both capital and human resources to manage the new business of
supplying its own raw materials.

5. When the advantages of stable prices are particularly important

6. When present suppliers have high profit margins, which suggests that the business of supplying
products or services in the given industry is a worthwhile venture.

7. When an organization needs to quickly acquire a needed resource.

∆ 3. Balanced Integration: Balanced integration: A company may want to gain the advantages of both
backward and forward strategies. If it does, it can pursue balanced integration.

∆Summary:

Forward integration: an organization buys the retailers or distributes directly to the end-user

Backward Integration: organization buys the supplier

Balanced Integration: an organization buys from both ends and gets complete ownership of the supply
chain

∆ 2. Horizontal integration

Horizontal integration is another competitive strategy that businesses use to increase their power in the
market. Unlike vertical integration, horizontal integration involves gaining control over other businesses
that provide similar products or services. This helps the business increase in size or expand into a new
area or market.
A horizontal integration strategy provides value to an organization through mergers and acquisitions. In
this methodology, an organization acquires another organization in the same industry to gain a
competitive advantage

∆( isa isa) Guidelines in which horizontal integration strategy can be use effectively

1. When an organization can gain monopolistic characteristics in a particular area or region without
being challenged by the federal government for “tending substantially” to reduce competition.2. When
an organization competes in a growing industry.

3. When increased economies of scale provide major competitive advantages.4. When an organization
has both the capital and human talent needed to successfully manage an expanded organization.

5. When competitors are faltering as a result of a lack of managerial expertise or a need for particular
resources that an organization possesses

∆ Intensive Strategies - Intensive strategies are those strategies, which demand furthermore intensive
efforts to improve the performance of existing products in the market.

∆ Types of Intensive Strategies in Strategic Management

∆ 1.Market penetration- a strategy which seeks to increase market share for present products or
services in present markets through greater marketing efforts.

∆ ( isa isa) Guidelines in which market penetration strategy can be use effectively

There are certain conditions that are more suitable to the market penetration strategy. In order to make
market penetration strategy effective, certain guidelines should be followed by the organization in this
regard.

1. When current markets are not saturated with a particular product or service.

2. When the usage rate of present customers could be increased significantly.

3. When the market shares of major competitors have been declining while total industry sales have
been increasing.

4. When the correlation between dollar sales and dollar marketing expenditures historically has been
high.

5. When increased economies of scale provide major competitive advantages.

∆2. Market development - a strategy involves introducing present products or services into new
geographic areas.

∆ ( isa isa) Guidelines in which market development can be use effectively

1. When new channels of distribution are available that are reliable, inexpensive, and of good quality.

2. When an organization is successful at what it does.

3. When new untapped or unsaturated markets exist.

4. When an organization has the needed capital and human resources to manage expanded operations.

5. When an organization has excess production capacity.

6. When an organization’s basic industry is rapidly becoming global in scope.

∆ 3. Product development is a strategy that seeks increased sales by improving or modifying present
products or services. Product development usually entails large research and development
expenditures.

∆( isa isa) Guidelines in which market development can be use effectively

1. When an organization has successful products that are in the maturity stage of the product life cycle;
the idea here is to attract satisfied customers to try new (improved) products as a result of their positive
experience with the organization’s present products or services.

2. When an organization competes in an industry that is characterized by rapid technological

developments.

3.When major competitors offer better-quality products at comparable prices.

4.When an organization competes in a high-growth industry.

5. When an organization has especially strong research and development capabilities.

Lain nmn ni nga part. After melessa guro.

∆ Strategic Management in nonprofit and governmental Organizations

∆ Nonprofit organizations refers to a group organized for purposes other than generating profit and in
which no part of the organization's income is distributed to its members, directors, or officers.Basically
Nonprofit Organization just like a profit companies except for two major differences: (1) nonprofits do
not pay taxes and (2) nonprofits do not have shareholders to provide capital.

∆ Many nonprofit and governmental organizations outperform private firms and corporations on
innovativeness, motivation, productivity, and strategic management. compared to for-profit firms,
nonprofit and governmental organizations may be totally dependent on outside financing. Strategic
management provides an excellent vehicle for developing and justifying requests for needed financial
support.

∆ Educational Institutions- Strategic management and planning provide the proper ground for defining
the roadmap of any educational complex to develop success in schools. In general, the most important
strategic management success factor in any educational complex is its human resources which make it
possible to achieve a successful school.

∆ Medical Organizations- Strategic management is concerned with strategic choices and strategic
implementation; it provides the means by which organizations meet their objectives. In the case of
hospitals it helps executives and all employees to understand the real purpose and long term goals of
the hospital. Also, it helps the hospital find its place in the health care service provision chain, and
enables the hospital to coordinate its activities with other organizations in the health care system.
Increasingly, medical organizations are having to recalibrate their health care strategies to suit current
market trends and changing approaches to patient care.

∆ Governmental Agencies and Departments

Strategic management is an approach to strategizing by public organizations or other entities that

integrates strategy formulation and implementation, and typically includes strategic planning to
formulate strategies, ways of implementing strategies, and continuous strategic learning. Strategic
management can help public organizations or other entities achieve important goals and create public
value.