Forward integration
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The document discusses forward integration, which is a business strategy where a company owns and controls activities further down the value chain, such as direct distribution of its products. Forward integration is effective when there are few quality distributors, distributors have high profit margins, distributors are expensive or unreliable, the industry is growing, or the company has the resources to manage new business activities. Examples provided are Aashirvaad atta manufacturing its own flour and then selling directly to customers, and Apple opening its own retail stores for direct sales after issues with other retailers.
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Forward integration
- 1. Forward integration Presented by : Sana Avinash 190209120027
- 2. Forward Integration Forward integration is a business strategy that involves a form of downstream vertical integration whereby the company owns and controls business activities that are ahead in the value chain of its industry, this might include among others direct distribution or supply of the company's products.
- 4. Forward integration strategy is effective when: • Few quality distributors are available in the industry. • Distributors or retailers have high profit margins. • Distributors are very expensive, unreliable or unable to meet firm’s distribution needs • The industry is expected to grow significantly. • There are benefits of stable production and distribution. • The company has enough resources and capabilities to manage the new business.
- 5. Example: 1.Aashirvaad atta.. its Raw materials gather from the farmers . and it a manufacture into product in factor. Its come to distributor to retail stores and finally the come in customer hand. 2.Apple had Launched their own Retail Stores Apple Had Been Plagued With A Decade Of Bad Retail Experiences At The Hands Of Others. In 2001, Apple Launched Its First Apple Retail Store To Enable Its Customers To Buy Apple Products Directly From Their Outlets. Now Apple Has Many Retail Stores Which Increased Customer Satisfaction More.
- 6. Thank you