CHAUNCEY  M. HOLLIE

DECEMBER 03, 2002

MANAGEMENT 320

INTEGRATION STRATEGY

Strategy- a central, integrated, externally oriented concept of how a business will achieve

                its objectives.

     A business strategy must create a clear idea of how profits will be generated.  In order

to create wealth for their organizations, strategic leaders must make decisions that achieve

above average returns, thus ensuring the future capability and present financial stability of

their organization.  A type of strategy that can be advantageous to an organization is an

integration growth strategy.  According to the Oxford University Dictionary of Business,

integration is the combination of two or more companies under the same control for their

mutual benefit, by reducing competition, saving costs by reducing overheads, capturing a

market share, pooling technical or financial resources, cooperating on research and develop-

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ment, etc.  The integration strategy is divided into two categories; horizontal and vertical.

This paper will discuss the advantages that a company can gain through horizontal or

vertical integration.

     Horizontal integration is the combination of two or more companies in the same

business, carrying out the same process or production, usually to reduce competition and

gain economies of scale.  The main advantage involved with horizontal integration is

growth.  Two or more organization group together to form a larger entity, which in turn,

gives them the ability to ...

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