STRENGTHENING A COMPANY’S COMPETITIVE POSITION: STRATEGIC MOVES, TIMING, AND SCOPE OF OPERATIONS

STRENGTHENING A COMPANY’S COMPETITIVE POSITION: STRATEGIC MOVES, TIMING, AND SCOPE OF OPERATIONS

The figure show strengthening a firm’s market position via its scope of operations.

There have two scope of the firm operations first HORIZONTAL SCOPE and second VERTICAL SCOPE.

Horizontal scope means the range of product and service segment that a firm serves within its focal market. The horizontal merger and acquisition strategies, means of horizontal merger is the combining of two or more firms into a single corporate entity that often takes on new name it’s like establishment of a new company while the two or more names of those want to involve in the merger will not exist anymore. Take as example: Golden Hope + Sime Darby + H&C = Sime Plantation. Then mean of Acquisition is a combination which one firm, the acquirer, purchases and absorbs the operations of another firm, the acquired. In other word, SPAC is the acronym for Special purpose Acquisition Company and also a company that is initially listed with no operations using cash raised from its IPO (Initial Public Offering). The funds are raised based primarily on the prior track record of the individuals forming the management team who promote the venture. Take as example: F&N à Red Sena Bhd.

A Vertically integrated firm is one that performs value chain activities along more than one stage of an industry’s value chain system. There has Vertically Integrated Firm and Vertical integration strategy. Mean of vertically integrated firm is one that participates in multiple segments or stages of an industry’s overall value chain. Thus, vertical integration strategy mean is can expand the firm’s range of activities backward into its sources of supply and/or forward toward end users of its products.

Full integration means a firm participates in all stages of the vertical activity chain. And means of partial integration is a firm builds positions only in selected stages of the vertical chain. The mean of tapered integration is involves a mix of in-house and outsourced activity in any stage of the vertical chain.