State the Types of integration
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Types of integration
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Horizontal
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Target company has same operations, and is in the same industry as predator company. Greater economies of scale can be achieved. For example integration of two firms in exactly the same industry and at same stage of production, like Mars taking over or merging with Cadbury.
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Backwards
vertical
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Predator moves back down its supply chain, so consequently purchases its suppliers - to increase quality and have control of goods. For example a firm integrating backwards within the supply chain within its industry, with a supplier involved in a different stage of production, like Mars integrating with a coco plantation or a coco wholesaler.
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Forward
vertical
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Predator moves forward and purchases its customers (for example brewery buying a pub chain) - ensures control of pricing, market place etc. for example a firm integrating forwards within the supply chain within its industry, towards or closer to customer involved in a different stage of production, like Mars integrating with Thornton's retail shops.
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Conglomerate
or lateral
integration
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Predator wants companies in various industries, thus reducing risk by diversification. For example integrating two organisations which are involved in different products and markets, like Mars integrating with Next clothing stores.
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