Case Study

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INTRODUCTION

ASOS.com is the UK’s leading online fashion retailer established in 2000. It targeted 16-32 years old fashion conscious customers. It offers own-label, branded and designer fashion goods. Its up-to-date fashions are available to buy through the internet. ASOS.com uses the product life cycle to make sure products always meet customer needs. asos.c

Q3: what is meant by horizontal integration and vertical integration? HORIZONTAL INTEGRATION
* The acquisition of additional business activities at the same level of the value chain. * This occurs when a company takes over, or merges with a direct competitor. * This can be achieved by internal expansion or external expansion. ADVANTAGES

* Economies of scale- achieved by selling more of the same product, for example, by geographic expansion. * Economies of scope- achieved by sharing common to different products. * Increased market power.

* Reduction in the costs of international trade by operating factories in foreign markets. * Reduction in competition.
* Fulfilling customer expectations’

EXAMPLES
* A media company’s ownership of Radio, Television, Newspapers, Magazines, Books. * Pharmaceutical companies frequently combine forces to share research and development expenses to bring new products to market. According to research by Henderson and Cockburn in 1996, firms involved in drug discovery realize economies of scope by sustaining diverse portfolios of research projects that capture both internal and external knowledge spillovers * The formation of Brook Bond Lipton India ltd. Through the merger of Lipton India and Brook Bond. * The merger of Bank of Mathura with ICICI (Industrial Credit and Investment Corporation of India) Bank. VERTICAL INTEGRATION

* it acquires a business at a different stage in the chain of production. * It may acquire businesses that were previously its suppliers or its customers. *...
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