Week 4 Assignment
Discussion 4 Complete Learning Exercise E on p. 177.
Strategy Definition
Forward Integration Gaining ownership or increased control over distributors or retailors
Backward Integration Seeking ownership or increased control of a firm’s suppliers
Horizontal Integration Seeking ownership or increased control over competitors
Market Penetration Seeking increased market share for present products or services in present markets through greater marketing efforts
Market Development Introducing present products or services into new geographic area
Product Development Seeking increased sales by improving present products or services or developing new ones
Related Diversification Adding new but related products or services
Unrelated Diversification Adding new, unrelated products or services
Retrenchment Regrouping through cost and asset reduction to reverse declining sales and profit
Divestiture Selling a division or part of an organization
Liquidation Selling all of a company’s assets, in parts, for their tangible worth
1. Amazon started producing and selling its own line of diapers.- Product Development
2. MillerCoors offers free delivery of Miller Lite in four U.S. cities for customers who order through its online store.- Forward Integration
3. Sears is closing about 235 stores annually.- Retrenchment
4. The largest toymaker in the United States, Mattel, is struggling; therefore, it is introducing flashier and more educative toys. – Related Diversification
5. German power utility E.ON SE sold its Spanish assets to Australia’s Macquarie Group and Kuwait’s sovereign-wealth fund for $3.1 billion. – Divestiture Strategy
6. Target Corporation is closing all of its 133 stores in Canada and China. - Retrenchment
7. Coca-Cola recently axed 1,600 white-collar jobs globally as part of a cost-cutting move. - Retrenchment
8. Nissan has totally revamped its Titan full-size pickup truck with new features and options and style. – Product Development
9. General Motors just introduced a sports car version of its electric car, the Chevrolet Volt, and is introducing an all-electric vehicle in 2017 called the Chevrolet Bolt, capable of driving 200 miles without recharging. – Product Development
10. SolarWinds acquired Pingdom, Confio, and N-Able Technologies to obtain different products and services since the solar business has slowed as oil prices have dropped. – Unrelated Diversification
11. Amazon Studios is branching out from television series to movies, with plans to begin producing and acquiring original movies for theatrical release and video streaming. – Related Diversification
12. ZF Friedrichshafen AG of Germany recently acquired TRW Automotive Holdings in the United States to create the world’s second-largest auto-parts supplier behind Germany’s Robert Bosch GmbH and ahead of Japan’s Denso Corp. – Horizontal Integration
13. Southwest Airlines recently began flying outside the United States, with flights to the various Caribbean, Central America, and Mexico destinations. – Market Development
14. Amazon is pushing aggressively into the same-day grocery delivery service with its Amazon Fresh business along the west coast of the United States. – Forward Integration
15. USPS has begun delivering groceries for Amazon.com within the Amazon Fresh grocery-delivery service, especially in San Francisco and other markets. – Backward Integration
16. USPS also recently launched Access Point, a strategy that allows customers to pick up their packages at dry cleaners, convenience stores, and pharmacies. – Market Development
17. The huge food company General Mills recently acquired Annies’ Inc. for $820 million, paying a 37 percent premium for the firm, in order to expand its presence in the rapidly growing organic and natural foods category. – Horizontal Instructional
18. Google recently entered the hotel-booking industry by acquiring the firm called Room 77 and expanding its ties with big hotel firms such as Hilton Worldwide Holdings and Radisson Hotels that now offer virtual tours on Google. Google now allows hotels to list their rooms on their site, in effect bypassing travel search sites such as Priceline Group, Expedia, and TripAdvisor. Unrelated Diversification
19. Google recently partnered with the medical firm Novartis to develop high-tech contact lenses that monitor glucose levels and other body functions. – Unrelated Diversification
20. Amazon recently entered the mobile payments business and is now competing with PayPal, ApplePay, and all charge cards. – Related Diversification
21. The world’s largest furniture retailer, IKEA, recently diversified into the insurance business, providing child, pregnancy, and home insurance products at its stores. – Unrelated Diversification
22. Office Depot closed nearly 500 stores in the last three years. - Retrenchment
23. The drugmaker, Dendreon Corporation, recently filed for Chapter 11 bankruptcy. Its major drug, Provenge, which treats prostate cancer, never gained traction in the market. - Liquidation
24. Symantec Corporation, known for its antivirus software, recently split its $4.2 billion cybersecurity business away from its $2.5 billion management information business, making them two publicly traded companies. – Related Diversification
25. eBay recently split into two companies, with PayPal being one and the eBay Marketplace segment being the other. – Related Diversification
References:
David, F. R, & David, F. R. (2017). Strategic Management. Concepts and Cases. A Competitive Advantage
Approach. (16th Ed.). Boston: Pearson Education, Inc.