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The Supply Chain of a Particular Industry

   

Added on  2020-05-01

7 Pages1722 Words51 Views
By student name ProfessorUniversityDate: 15 October ,2017

1ContentsQuestion 1.................................................................................................2Question 2.................................................................................................3Refrences...................................................................................................61 | P a g e

2Question 1Vertical merger occurs between two companies who are operating at different levels within thesupply chain of a particular industry. Mostly it occurs between a supplier and the manufacturer of aparticular product within the supply chain. The few important characteristics of vertical mergers are – •It occurs between companies that are operating at different level within the samesupply chain of any product. It is done in order to increase the synergies of production and themanufacturer can take the entire control of the production of a product from manufacturing tosupplying the same. Vertical mergers have their own share of advantages and disadvantages; howeverthey help in having a strategic view to the overall production of the goods.•There are various types of vertical mergers like forward integration and backwardintegration. There are five stages in case of a supply chain of a product: raw material, intermediaries,manufacturing, assembling and distribution[ CITATION Vis17 \l 16393 ]. The vertical merger types movesup and down the supply chain and the people operating in that stages. Forward integration occurs whenthe company moves forward to get hold of the supply chain and remove all the intermediaries from thesupply chain. Backward integration occurs when the manufacturer moves up the supply chain to gethold of the production of the raw materials. These are the two types of vertical mergers. They help indevelopment of synergies that helps in simplifying the overall process of production and makes it easierfor the manufacturers and the suppliers to negotiate terms and generate more amount of profit.•Vertical mergers are helpful for the public also as removal of intermediaries helps inreduction of the overall cost of the product. Thus it helps in simplifying the overall process of productionof the products and makes it easier for different companies to operate together. It helps in eliminationof unnecessary middle men that leads to increasing the overall cost of the products these are the fewbenefits of the vertical mergers that will be discussed in brief in the given case study.[ CITATION Koh17 \l16393 ]2 | P a g e

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