ADMS 4900 Lecture Notes - Strategic Alliance, Vertical Integration, Joint Venture

• School: York University
• Department: Administrative Studies
• Course: ADMS 4900
• Professor: You- Ta Chuang

Document Summary

Relatedness: similar markets, related core competence (e. g. mcdonalds coffee) Synergy creation is a form of value creation economies of scope. Economies of scope: number of products and services provided by a company in different markets, and reducing the costs of the products and services by sharing the companies existing resources; synergy (e. g. bell store offer various services) Backward integration: e. g gm using gm parts, metro selling select products. Critical question: what activity is the company doing? . Lower transaction costs outside the firm (quality, cost, delivery); beyond money. Pooling resources of other companies with a firm"s own resource base (alliances) Internal development better control over process: new products, new markets, new technology. Bear all the risk since you are alone. Within the porters 5 forces model, if 2 competitors merge (horizontal m&a; related markets) Supplier power decreases in relation to the competitors. Buyer power decreases in relation to the competitors.