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

Define elasticity of demand, In considering the price part of the 4Ps, and ...

In considering the price part of the 4Ps, and the customer demand aspect of that, I'd like you to leave this course knowing about "elasticity of demand". Can you explain how that c

Explain your terms as you apply them to the relevant facts, You are current...

You are currently an intern working for the largest law firm in Alabama. Your mentor and senior attorney introduces you to a new client, Dick Jefferson, the owner of House Doctor,

Define the main considerations regarding logistics alliances, What are the ...

What are the major considerations regarding logistics alliances, for: a) initiation? b) implementation? c) maintenance? d) termination?

Explain simple regression analysis is a tool, Simple regression analysis is...

Simple regression analysis is a tool that characterize relationships between a _______________ and _____________________. regression partner, simple partner dependant variab

Explain what type of noise was experienced, Choose a communication situatio...

Choose a communication situation you recently experienced at your workplace or other organization you are affiliated with. Use the human communication process described on pages 10

Explain process-improvement efforts, Until the start of the 1980s, most U.S...

Until the start of the 1980s, most U.S. companies focused on maintaining quality levels by utilizing which of the following practices? Process-improvement efforts Design-qual

Operation functions of an organization, Operation functions of an Organizat...

Operation functions of an Organization Case study IKEA is the most successful furniture retailer ever. With 276 stores in 36 countries, it has managed to develop its own s

Explain impact of globalization and information technology, Assess the impa...

Assess the impact of globalization and information technology on the creation of small businesses. Determine if and how these two trends have helped or hindered the growth of small

Explain current design strategy, In what ways does an airline alliance refl...

In what ways does an airline alliance reflect each of the four dominate themes of current design strategy?

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