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Constellation Brands CEO: Extremely Optimistic | Mad Money | CNBC
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Backward Integration Backward integration is a strategy of seeking ownership or increased control of a firm's suppliers. This strategy can be especially appropriate when a firm's current suppliers are unreliable, too costly, or cannot meet the firm's needs. Starbucks recently purchased its first coffee farm-a 600-acre property in Costa Rica.
This backward integration strategy was utilized primarily to develop new coffee varieties and to test methods to combat a fungal disease known as coffee rust that plagues the industry. Manufacturers as well as retailers purchase needed materials from suppliers. The huge wine and beer producer, Constellation Brands, recently purchased several glass- bottle factories after experiencing problems with several suppliers of their bottles.
Constellation acquired a controlling interest in a Mexican Anheuser-Busch glass-bottle factory, giving Constellation ownership now of more than 50 percent of the glass bottles it uses. Some industries, such as automotive and aluminum producers, are reducing their historical pursuit of backward integration.
Instead of owning their suppliers, companies negotiate with sev- eral outside suppliers. Ford and Chrysler buy more than half of their component parts from out- side suppliers such as TRW, Eaton, General Electric (GE), and Johnson Controls. De-integration makes sense in industries that have global sources of supply. Companies today shop around, play one seller against another, and go with the best deal. Global competition is also spurring firms to reduce their number of suppliers and to demand higher levels of service and quality from those they keep.
Although traditionally relying on many suppliers to ensure uninterrupted supplies and low prices, many U.S. firms now are following the lead of Japanese firms, which have far fewer suppliers and closer, long-term relationships with those few. "Keeping track of so many suppliers is onerous," said Mark Shimelonis, formerly of Xerox.
SWOT Analysis. APA format using 12-point font size. Note that there should be headings for each topic noted in the outline.
This is an outline of what needs to be covered in your SWOT analysis for CEO Sands of Constellation Brands.
1. Identify the firm's existing vision, mission, objectives, and strategies.
2. Develop vision and mission statements for the organization.
3. Identify the organization's external opportunities and threats.
4. Identify the organization's internal strengths and weaknesses.
5. Construct an Internal Factor Evaluation.
6. Prepare a SWOT analysis matrix.