Value of Integration
By Michael Keane
Is your company capturing enough value from integration opportunities within its industry? Does your mission allow for an integration policy to be executed? Integrating the company with a vertical, horizontal or mixed strategy provides an opportunity to bring a higher level of value to your company, a larger customer base, and more influential position for the company within its industry.
In terms of vertical integration, a company could find higher value by owning more than one aspect from idea to sale of finished product. Large multinational companies regularly look to vertical integration for cost savings and market share dominance. A great example of a company that is vertically integrated is Apple. They have full control over their supply chain processes that give them freedom in their product markets. Even a partial vertical integration policy can affect value for a company.
In terms of horizontal integration, companies can be looking for other companies related to their industry in order to expand market share and create more value for itself and its customers. An example of a company that has a horizontal integration is Facebook. Facebook has recently purchased companies such as Instagram and Oculus Rift. Proctor and Gamble is another company that has many different products under its roof.
With new companies sprouting up with the growing entrepreneurship industry, integration might be one way for the companies to not just grow, but also for the brand to survive. Combining resources could ensure that a company outlasts any downturn in its industry or the economy as a whole. It is important for the company to educate itself on what is out there vertically and horizontally in its industry.
Forever Forward...
