Definition: The acquisition of ownership of a distributor or retailer or Strategies to strengthen control over them.

Advantages/Motivation: Helps enterprises control and master the market (buyer's market and seller's market) Increased sensitivity to changes in consumer demand (buyer's market) Improve the market adaptability and competitiveness of enterprise products (seller's market)

Applicable conditions (Combined with SWOT)

Definition: refers to obtaining ownership or increasing control over a supplier

Advantages/Motivation: Helps enterprises effectively control the cost of key raw materials and other inputs, Quality and supply reliability ensure the steady progress of enterprise production and operation activities.

Applicable conditions (Combined with SWOT)

Adopt a vertical integration strategy The main risks include

O The industry in which the company operates has great growth potential

S Enterprise has the funds, human resources, etc. required for horizontal integration

The economies of scale in the industry where Enterprise T is located are relatively significant.

The industry in which Enterprise T operates is highly competitive.

The horizontal integration of Company S complies with anti-monopoly laws and regulations and can obtain a certain monopoly position in local areas.

Expand market share

Develop niche markets

maintain market share

need to remember

Subjective questions

Commonality O When the overall market is growing

Commonality O Other companies have left the market for various reasons

Common Characteristics O Firms have a strong market position and are able to leverage operations and capabilities to gain competitive advantage

Characteristic S The company decides to limit its interests to existing products or market areas

Characteristic S The company decides to limit its interests to existing products or market areas

Characteristic O Lower risk, higher senior management involvement, less investment required

Open up other regional markets (more) and open up market segments

The nature of the production process for existing products makes it difficult to switch to new products (no new products can be developed)

Market development is often combined with product improvement

Existing markets or market segments are saturated and new markets can only be found

need to remember

Subjective questions

Commonality O There is an untapped or unsaturated market

Common S Enterprises are very successful in their existing fields

Characteristic S: The enterprise has the capital and human resources needed to expand its operations

Characteristic S: The enterprise has excess production capacity

Feature O Access to new, reliable, high-quality sales channels

Characteristics O The company’s main business belongs to an industry that is rapidly globalizing

Offer products in different sizes and colors; use different packaging for products, etc.

need to remember

Subjective questions

Common characteristics O The industry in which the enterprise is located is in a stage of rapid growth

Common S Enterprise products have high market credibility and customer satisfaction

Characteristic S: Enterprises have strong research and development capabilities

Characteristics O The industry in which the enterprise is located is a high-tech industry

Feature T Competitors offer higher quality products at similar prices

A company's strategy to enter related industries or markets based on its existing business or market. The correlation can be products, production technology, management skills, marketing channels or users, etc.; the purpose is to obtain integration advantages

A company's strategy to enter areas that are unrelated to current industries and markets; The purpose is to balance cash flow or obtain new profit growth points and avoid industry or market development risks.

Enterprise resources are always limited, and diversified operations mean that the original industry will be weakened.

After entering a new industry, enterprises must continuously inject follow-up resources; the competitive situation of the industry is constantly changing, and the strategies of competitors are also unknown. Enterprises must constantly adjust their business strategies.

If a company is mired in a wrong investment project but cannot escape unscathed, it may lead to the total annihilation of the company.

New businesses will have a comprehensive impact on the company's existing industries; different businesses have different requirements for management mechanisms. Enterprises must integrate the requirements of different businesses on their management mechanisms

The correlation in the market economy determines that various industries with diversified operations need to face common risks; The dispersion of resources in diversified operations increases the risk and may lead to the failure of each business.