How the U.S. companies use international banks

1. What are your initial thoughts about how you will approach this assignment? Explain.
2. Explain the differences between domestic banks and international banks.
3. How do U.S. companies use international banks?
4. What are the components of competitive strategy? Within competitive strategy what is the relevance of a value change framework? What are the implications for customers and the competition?
5. Cooperative strategies are the steps taken by two or more organizations to align strategies and resources to achieve a common goal. Discuss some considerations that must be taken into consideration when planning a strategic alliance.
6. What are the critical factors that are necessary in a joint venture to increase the likelihood of success?

Vertical integration refers to the establishment and maintenance of an internal supply chain within the company. (Editorial Board, 2015, p. 126)
Horizontal integration refers to a strategic approach to production for which a company acquires production units or capacity in complimentary or competitive markets. (Editorial Board, 2015, p. 130)

An example of a company that utilized vertical integration is Apple or Oracle. Both of these companies manage their products from development to the market. They manage the entire supply chain of their products and how they are sold. Apple has been very successful at managing vertical integration, without having to involve any other company in the process. Other areas where you might see vertical integration is in the oil and agriculture industries. This strategic process allows for an organization to maintain all of the rights to the products.
The auto industry can be an example of how horizontal integration strategies operate. Companies that utilize horizontal integration strategies have to involve different level players in their industry to help manufacture or produce their products.
Diversification strategy is utilized when a company is looking to expand or enter a different market. This is a strategy utilized to move into a new market or industry.
Global strategy provides many benefits to an organization the largest being international expansion. By having a global strategy as an organization you are looking into expansion beyond your borders. This opens up the market share and capitalizes on the money that can be earned. Global strategy allows for you to see the industry as one big picture. Organizations such as McDonalds had a global strategy in mind.

1. Horizontal Integration is a firm extension strategy, in which the firm obtains a similar business line or a similar value chain level to remove competition indeed. It happens when the production levels and products are the same between the two firms. It targets expanding the production scale and size of a business. It eradicates business rivalry, eventually extending the firm’s overall marketplace, only brings collaboration, however not independence, and aids with gaining control of the market.
   Examples of horizontal Integration are: Instagram gained by Facebook and Burger King obtained by McDonald’s.
   Vertical Integration is when two firms functions in different stages of the production method. It centers on bolstering and balancing its production-distribution process. Its outcome is dropping production cost, and excess aiding the business extend collaboration through independence. It is when a firm chooses to continue business on a similar product before incorporation. It is an extension strategy utilized to acquire total business control.
   Examples of Vertical Integration are: Apple – the largest and a well-known producer of smartphones, laptops, watches, etc. Independently, Apple controls the entire manufacture and supply procedure from start to finish.
   A second example is Netflix, which started as a DVD rental company that later realized that it could generate more revenue by shifting to original contact creation. Retaining rights and issuing straight to viewers lets Netflix to possess all profits, instead of imparting distributors.
2. There are many circumstances when diversification is considered a viable strategy. The existing market shows sluggish or motionless opportunities for progression. When new technologies/additional products made current area non-profitmaking, using the complexity and extensiveness of decision-making abilities and capabilities completely; Applying excess or reserved cash for a higher return rate. If a business usually introduces add-ons to lines of production and, at the same time, aims at newfound market sectors. The enterprises present a unique product with some similarity to current products while also entering a new venture.
3. Benefits that Global strategy provides an organization are:
   • Price discounts- through pooling construction or added activities for two or more nations
   • Developed quality of goods and plans- organizations concentrate on a lesser quantity of products and programs than multi-domestic approaches.
   • Improved consumer preference- Worldwide accessibility, functionality, and acknowledgment can upgrade consumer inclination byways of fortification.
   • More significant competitive control- offers additional ideas when to act and react with opponents.
4. Compare and contrast vertical and horizontal integration.
   Both integrations are used by businesses in the same industry or production process. In a horizontal integration, a company takes over another that operates at the same level of the value chain in an industry. On the other hand, a vertical integration involves the acquisition of business & operates within the same production vertical.
   • A horizontal acquisition is a business strategy where one company takes over another that operates at the same level in an industry.
   • Vertical integration involves the acquisition of business operations within the same production vertical.
   • Horizontal integrations help companies expand in size, diversify product offerings, reduce competition, and expand into new markets.
   • Vertical integrations can help boost profit and allow companies more immediate access to consumers.
   What are some of the variables make each of these integrations valuable?
   Some variables that I feel that makes each integration valuable is when horizontal integration is done efficiently, it can produce revenue significantly together, compared to if they were to compete independently. Also, a newly merged company can minimize costs by sharing technology, marketing, research and development, production, and distribution.
   In vertical integration, companies can achieve this by internally expanding, an acquisition or a merger. Some of the reasons why companies choose to integrate vertically include strengthening their supply chain, reducing production costs, capturing upstream or downstream profits, or accessing new distribution channels. To do this, one company acquires another that is either before or after it in the supply chain process.
   Provide an example of a vertical and a horizontal integration that has happened recently.
   Recent vertical integrations is when health care delivery system changes and has been constantly changing for more than two decades. Recent studies have demonstrated that vertically integrated health care systems raise prices and costs without observable improvements in quality, despite many theoretical reasons why cost control and improved quality might occur

An example of vertical integration is a retailer, like Target, which has its own store brands. It owns the manufacturing, controls the distribution, and is the retailer.
An example of horizontal integration was Facebook’s acquisition of Instagram in 2012 for a reported $1 billion. Both Facebook and Instagram operated in the same industry (social media) and shared similar production stages in their photo-sharing services. Facebook sought to strengthen its position in the social sharing space and saw the acquisition of Instagram as an opportunity to grow its market share, reduce competition, and gain access to new audiences. Facebook realized all of these through its acquisition. Instagram is now owned by Facebook but still operates independently as its own social media platform.

2. In what circumstances should an organization consider diversification as a viable strategy?
   Diversification is one of the strategies pursued by firms wishing to grow in newer markets and by launching newer products. Diversification usually entails the firms entering new markets in the industry in which they are already present by launching newer products.
   Consider diversification in the finance world, it’s a way to hedge your bets and ensure that, if one of your investments doesn’t pan out, you have a backup plan to buoy your portfolio until you find your pathway again, says William Craig of Forbes magazine.
   Diversification helps your company to remain competitive, it is not the definite solution but ignoring diversification can make or break a company sometimes, such as Blockbusters & Hollywood Video, both companies refused to adapt to the changing markets of going digital in the entertainment world. As the world changed over to digital, both of these companies failed at finding their new persona in new competitive market change. Netflix, notable noticed the change of a streaming entertainment world versus a video world and that is why they have flourished today. So when the market begins to change it is important for firms to follow the new trends in order to remain in demand and competitive.
3. What benefit does a global strategy provide an organization? Describe a situation when a global strategy would not be a viable solution for an organization.
   Global strategy has the ability to provide an organization with a defined strategy that requires a firm to closely define & coordinate their product and pricing strategies across international markets and locations; therefore, firms that pursue a global strategy are typically highly centralized. Global strategy is defined as a particular strategy guide to globalization, specifically when a firm or chain wants to expand not only internationally but globally as well. Global strategy helps companies grow from being an international company to a global company. Once upon a time, McDonald’s was classified as an international company.
   An international company focuses on the domestic market with some sales overseas. Their product or services are entirely made in their home country. On the other hand, an international company may also be defined as a company that sells imported products in the domestic market.
   Global strategy would not be a viable solution for an organization that would not be able to potentially answer the following questions and meet the overall goals and expectations. A SWOT analysis should be conducted before making the move to expand globally. Globalization strategies are also flawed, which can lead to the company’s downfall. Truly global corporations began appearing early in the last century, and their number has grown—with both successes and failures along the way…ever since. The following questions should be asked and answered if a company is considering expanding globally:
   Are there potential benefits for our company?
   Do we have the necessary management skills?
   Will the costs outweigh the benefits?

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