BUSINESS ENVIRONMENT AND STRATEGIC MANAGEMENT

Business Environment and Strategic Management

Business Environment and Strategic Management

Introduction

The main purpose of this paper is to discuss the different strategies that can help the company in supporting their growth strategy. The first strategy is the change in the organizational structure, and the second strategy is the merger and acquisition strategy. The paper makes analysis of the effect on the organizational structure of companies of changes in corporate structure, and the ways in which corporate objectives are set and how they have relation to business policy and strategic management.

Discussion

Companies adopt different measures in order to go for the growth of the company. These strategies help the company in knowing about the correct path and getting the thriving business measures. The business strategies can be of different types. A company can adopt different measures so that it can attain the business growth (Aaker, 2009, p. 137). In order to get the growth and success, the company can go for the internal changes in the company's structure, can create competitive strategies or even can go for mergers and acquisitions.

Change in the Organizational structure

Change in the organizational structure is a very successful strategy adopted by many companies in order to achieve the company's growth. There are many companies that adopt the strategy of changes in the organizational structure. One example to be stated here is the example of Tesco which is a global retailing company. In order to achieve the company's growth, Tesco adopted the strategy of change in the internal structure of the company (Ettenson, 2006, p. 39). Tesco changes its structure from the horizontal integration to the vertical integration, and as a result, the company achieved a profitable growth. Tesco was firstly using the horizontal integration and then it moved towards the vertical integration.

Horizontal Integration

Horizontal integration involves the company's growth through the addition of competing firms producing similar products or to control them (Buatsi, 2006, p. 17). The strategy is implemented through the acquisition of or merger with another company, acting on the same stage of the value chain. At the same time, companies can operate in different market segments. In this case, the union of segments of the market creates new competitive advantages. There are a number of reasons that contribute to the choice of a strategy of horizontal integration: Horizontal integration is associated with an increase in the industry; it measures the Economies of scale after the merger enhances the benefits; Organization may have an excess of financial and human resources that will enable it to manage the enlarged company and the association are a tool to resolve substitute products. If the integration does not lead to significant cost savings or additional benefits, it is not justified strategically and financially.

Advantages of Horizontal Integration

The horizontal integration seeks to control or acquire ownership of competitors. The horizontal integration strategy is applicable when:

When the organization can acquire monopoly characteristics in an area or region unaffected by the federal government to "build notoriously" to reduce ...