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Horizontal and Vertical Growth

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1.
A. What is the difference between horizontal growth and vertical growth?
B. Name and discuss a real-world company that focuses more on horizontal growth and a real-world company that focuses more on vertical growth. Why do these two companies choose different growth strategies?

2.
A. What is a corporate strategy?
B. Why is it important for a small business to identify and have a corporate strategy?

3.
A. From the perspectives of outsourcing, taxes, competition, and finances, how has the growth in globalization affected corporate strategy in the United States of America?
B. Define risk and discuss how it affects the strategic planning process.
C. With respect to innovation, sustainability, and the global market, how would you decide whether a risk is worth taking the chance on as to when to create a strategic plan?

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Solution Preview

1.
A. Vertical growth takes place when companies in a supply chain growth through a common owner. Horizontal growth takes place at the same level of the value chain. In case of vertical growth the one company purchases another member of the supply chain. In case of horizontal growth one company buys up competitors.

B. A real world company that focuses on horizontal growth is Standard Oil Company which acquired 40 refineries. Standard had refineries and it bought more refineries. The strategy will help to gain a larger market share.
A real world company that focuses is on vertical growth is Apple Inc. It has controlled the hardware and software production of iPhone and the iPad. The company uses this strategy so that there is close compatibility among the hardware, processor, and the software. This makes Apple products unique.

2.
A. The corporate strategy is the overall direction and scope of a business and the manner in which its business operations work together to ...

Solution Summary

Diversification for growth is explained in a structured manner in this response. The answer includes references used.

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See Also This Related BrainMass Solution

Business Policy and Strategic Planning

How does horizontal growth differ from vertical growth as a corporate strategy? From concentric diversification?

Horizontal growth is the expanding of a firm's activities into other geographic regions and/or by increasing the range of products and services offered to current markets. Vertical growth, in contrast, involves a firm's taking over a function previously performed by a supplier or a distributor. Concentric diversification, in contrast, is the addition of products or divisions, which are related to the corporation's main business, but are added because of the attractiveness of other industries rather than because they support the activities of the current product lines.

Please discuss these three strategies with some relevant examples.

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