1. In your opinion, when would forward integration be a particularly good strategy to pursue?
The forward integration best suites organization when the present distributors prove to be inaccessible in terms of resources (expensive) by the operating firm. Since they untrustworthy and cannot manage to meet the distribution requirements to serve the clients effectively. The organization’s capability can adequately manage to meet the expenses it incurred, and be able to conform to the cost requirements of the distributors’ cost which is costly. In addition, my opinion the forward integration would apply suitably especially when the number of reliable and quality distributors in minimal. Since in its operation cannot offer quality and competitive advantage above the same operating firms.
Mainly, in the field of business a firm constantly encounters very competitive businesses, which have already established themselves. These present to the new incoming business with stiff competition, which I would propose applying forward integration would be a good opinion lest it collapses or risks closure. This is mainly in a new or upcoming industry which might develop new strategies or challenging tactics to the organization, and is expected to perform excellently. This calls for the application of forward integration for the business to overcome with these challenges in proving its worth.
A firm, which has already available and reliable capital plus human resources can adequately use forward integration in its operation, since the management has been eased especially distributing own products. This ensures that the business does not incur much expense since the management is in the hands of the already available resources. Additionally, I would propose the application of forward integration when the firm benefits from the elevated, stable production plus when the already present distributors have set elevated profit margins.
2. Discuss your opinion of Michael Porter’s generic strategies and when you might utilize them in your business.
In Porter’s explanation concerning generic strategies, he postulates that they play a vital role in implementing them in the firm’s operations. This offers the firm an elevated competitive advantage in contrast to the existing or the same business. The cost leadership strategy implies employing much consideration in pricing a commodity for sale. This comprises pricing a commodity having client’s ever changing trends due to prices. This I will implement it during production to ensure that the production cost is less expensive so that cost commodity is client-friendly. Consequently yielding to clients opting for my products over the other businesses’, which are costly in comparison.
The Differentiation strategy involves offering goods plus services which are unique in its making with intent consideration of cost per product. This ensures that the product or service targeted to a particular clientele is not turned down, owing to its high price. I will apply this strategy especially when the already existing product or service is at high supply. In this situation, I will re-adjust mine with fine details at considerable expenses, which will appear different from the others and presentable.
Porter advocates for “focus” where the business ought to cater for even the small clientele which the big and prominent firms ignore. I will take advantage of this ignorance where my products and services will be aimed at fulfilling the needs of the small or low clientele. This will only be achievable via sound evaluation of benefits the firm will enjoy while in its operations. The low clientele comprises the biggest pool compared to the high which in most cases take long buying intervals in comparison. This will entail application of skills which are transferred among autonomous firms.
Reference
David, F. R. (2008). Strategic management: concepts, 12 Ed. United States of America. Prentice Hall.
