Vertically integrated or virtual organisation, Operation Management

Assignment Help:

Vertically Integrated or Virtual Organisation

An organisation might decide not to source goods or services externally but to own the supplier company itself. For instance a media company may also own or part own a publishing house or a paper mill or a distribution company. This is known as vertical integration. There are considerable difficulties with vertical integration as it expands the breadth of competencies required by an organisation. This is very much in the opposite direction to the business excellence - operational strategy.

The alternative is horizontal integration with chains of suppliers working in harmony to create a virtual organisation. This kind of organisation may manage to supply markets which individual companies working alone could probably not achieve. It can be a long- term relationship. However, the life cycle of virtual organisations may also be brief as they serve markets where change and fluidity are common features. Their alliances form and reform to adapt to changing market behaviour. This kind of organisation may be very efficient by achieving agile and lean performance with low capital investment. There is one further strategy which operates in Japan. Keiretsu is a coalition of vertical and horizontal integration as groups of companies operate in close co-operation. These groups often incorporate their own banks and distribution network. This approach however is limited to Japan.


Related Discussions:- Vertically integrated or virtual organisation

Explain network design is a key business decision, Network design is a key ...

Network design is a key business decision as well as a technological decision. Why? Provide an example of a company you believe has a good network design, providing supporting rati

Explain ethical principles in marketing situations, Applying sound ethical ...

Applying sound ethical principles in marketing situations: a.is a losing battle. b.must be a continuous process. c.requires a major competitive fight. d.is impossible for most comp

Formulate the problem of maximizing weekly profit, Problem: A leather c...

Problem: A leather company manufactures leather jackets and leather handbags. A leather jacket requires 8 square feet of leather, while a handbag requires 2 square feet. In ad

Political risk for an organisation, Identify, with examples, groups that ma...

Identify, with examples, groups that may represent a significant political risk for an organisation that is considering engaging in Foreign Direct Investment.  When companies a

How examine his deposit box, Several weeks after a depositor's death, Chase...

Several weeks after a depositor's death, Chase Manhattan Bank paid 12 checks on the deceased depositor's account. The depositor's signature on the checks had been forged. The estat

Explain what use of the term sale rather than demand presume, What does use...

What does use of the term sales rather than demand presume?

Explain how can she be sure of her judgment, How can she be sure of her jud...

How can she be sure of her judgment? • How can she convince the marketers? • How should she act in this situation?

Explain main reasons businesses safe guard the environment, What are the ma...

What are the main reasons businesses don't conserve natural resources or safe guard the environment?

Time lag effects - operations function, Time Lag Effects - Operations Funct...

Time Lag Effects - Operations Function Feedback control in complex systems can bring its own problems, due to time lag between measuring the output deviation and realising the

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd