Horizontal Integration

Horizontal IntegrationOverviewThe introduction of the beau monde Davis operate classify which is the biggest play along in the UK and Europe in the provision of textile maintenance service (in the main) along with the wash room services, laundry, dust control mat and bet wear rentals. Besides that it worked take down in the US (Davis services pigeonholing) and their focus to grow was real straight forward that is wherefore they give preference to plane desegregation in 2002 and take e trulyplace Berendsen friendship (leader of the food grocery of Europe in the same temperament of disdain), the acquisition of the participation was helpful as it was non much difficult for the Davis group to take over the Berendsen simply also Berendsen was the commercialize leader but not well off like Davis root.The leading(p) company of the textile in Europe is berendsen with 80 service stations and 7300 employees. The work of these service stations is to manage the laundry, ma intenance, textile rental, and supply. It also has the supply and manufacturing undercoat in Sweden and Estonia.Information about BerendsenTwo major ways on which company may growHorizontal consolidationThe plain desegregation in the normal words toilette be expressed as the expansion of the existence caper into the same nature of the business, for example if the business is running in slightly particular field like trade of some particular wides or services is extended into the same sort of product called horizontal integration. We can give the example of the unifyr of Morrisons with subway (can be a good example of horizontal integration), hence this is the best known Britains horizontal integration merger in Feb, 2004. Which was tally to exploitation and expansion of the business was the right and wise conclusion.(Flouris, T. G. And Oswald, S. L., 2006)Examples of horizontal integration of any companyHorizontal integration of the business can be understandable as the companies which argon working throughout the world when ever these be merging or taking over the other companies, firms or bodies actually these or they ar buying the shares of the company and become the owner of the company happened in the same sort of business. There are few examples of such companies below, which did the integration both horizontally as well as steeply. Though I discussed earlier example of the horizontal integration i.e. Morisons with the subway. Forgetting the after affects regarding the situation in the stock market the integration made the positive result in the expansion and produce of the business.Vertical integrationthe vertical integration can be illustrated as the expansion of the business in some irrelative nature of the business, means the expansion in some other nature like a company involves in selling the goods only and expanding the business in providing some services means add services as a part of their business is called vertical integrati on.Examples of vertical integration of companyExamples of the companies which have extended their businesses in non similar way of business are called vertical integration of the companies the example of such integration made by the company wall mart and its takeover to the Asda and then merger of kingfisher also is the example of the vertical integration of the companies. This take over was the example where three different type of the businesses joined together to put the business grow further ahead, like Davis Services Group did before with sunshine and other units of the business.Option available to Davis Company in making ontogeny strategyDuring making the decision of the company of Davis services the company had some(prenominal) options available to grow but the company chose to go for the horizontal integration where they carry out the business in full strength as the acquiring of the Berendsen company by Davis Services Group really become helpful for the Davis group of com pany to grow in already strengthen gripped up market by Berendsen.the options available to Davis was first of all to see that which markets were the to the highest degree suitable to them to carry out the business, which should be suitable regarding the market analysis like, language, currency, tralatitious and cultural differences etc. though they had to take the decision after passing out from all these localises. It is the law of the business that I should be running according to the demand of the customers. So they had choices of expanding accordingly the order they used to follow in their nation and they succeeded as European union is the most reliable market for the business growth.How these options would benefits the companyThe company having the same nature of business running but not very much profitable as Davis is in the Britain. Hence in that location was the financial assessment of the company were taken by the Davis completely where the company is being watched in the way to its financial responsibilities, current assets, current liabilities, companies good will etc is being calculated after that Davis group assumed the present condition and manage the funds by selling the share of 150 million as well as 425 million borrowed from the vernal bank.Q2 Business grows when they have the re denotations to expand and opportunities exist for growth. Explain how the acquisition of Berendsen provided such a good opportunity for the Davis Service Group.How businesses get the growthThe Davis services Group were the leader in their own market in UK, the need to expand was the great opportunity to get growth compensate beyond the limit of one nation. For that reason the company had an opportunity to grab the already working firm names berendsen.Financial requirements lens hoodital needed to start and capitalise the business is the basic requirement, we should know how capital will use in business also the equity that will be provided for the business. T he source should be well known if the loan for initial capital is taken on security replacement of equity.Current business positionIt is also undeniable to determined the current position of the business at the time of buying the business, hence same strategic step has been taken by the Davis group as per on acquisition of the company berendsen. DVSG Davis Service Group PLC, The(LON) 327.25 +3.75 (1.16%) 17 Jul 1234 GMTOpen327.25High329.00Low322.75Volume44,541Avg Vol0Mkt Cap557.59MDisclaimer Digital Look, Davis Service Group (DVSG), viewed 13 July 2009, http//www.digital way.com/companyresearch/10168/Davis_Service_Group/company_research.htmlMajor achievementsIt takes the detail of the developments in the company which includes patents and prototypes of the company and any crucial contracts that needs to be in place of product development. Statement of purpose, Make it easy for the reader to realize at first glance both your needs and capabilities.Entrepreneur, Elements of a Busin ess Plan, viewed 13 July 2009, http//www.entrepreneur.com/startingabusiness/businessplans/article38308.htmlixzz0LVWlPcRUAcquisition of the berendsen by Davis was really a good decisionAfter getting followed up with all the demand elements of growth to a businesses of any nature it is undeniable to see the acquisition of the berendsen and Davis weather companies took really a good decision or what outcomes showed it decision wrong.According to Mr. Roger dye the whole of the acquisition was very pleasant and basic reason for the takeover was to lead and grow the market, he utter the reason why they chose berendsen was thatIt was leader of the Europe market, just like Davis Group in UK.He said that geographically still UK is the main market but the European market was growing rapidly and still doing so.The offered qualities of the company areMoreover he said one of his another interview where he was briefly discussing the companys performanceStrategic Growth Concept, The Elements of the Business Plan, viewed 13 July 2009, http//www.strategicgrowthconcepts.com/services/Business-Information-Articles_I33/Article-The-Elements-of-the-Business-Plan_A30.htmlCompetence in the operations that we manage a safe pair of hands (what we say we are going to deliver, we will deliver). Ethically very strong, high levels of trust etc. A well supported progressive dividend policy. I think these are the sort of things that come to mind.ROGER DYE, FD of Davis Service Group says tie out challenge and opportunity is to deliver on Sophus Berendsen acquisition, viewed 13 July 2009, http//www.twst.com/notes/articles/lys024.htmlQ.3What aspects of European sexual union markets have particularly encourage any of the growth strategies?Discuss how the European Union markets encouraged the strategies of growthBusiness strategically growth of the Davis group after the acquisition of the berendsen company, how it is being supported by the European Union for the reveal growth of the strate gic business.The European Union market encourages the growth of Davis Service Group with the berendsen in Europe very much.If you are going to put setup of the business overseas it enables you growth specially if it is EU, with500 million potential customers and single market of 27 countries. As common currency is used in the whole market of currency it is easily doing the business (buying and selling) in much of the EU and a skilled workforce. Expansion overseas business has to take a number of factors into account. These include(V. C. and at all, 1999)languagecurrencyculture different legal and administrative claysVariable skill levels.Discuss the aspects of the European marketI. Peace and stability originally change state a real place of peace for the first half of the 20th century one cant think Europe as a united state, only one person have thought about it.French foreign Minister Robert Schuman give idea originally disposed(p) by Jean Monet, on 9 May 1950, proposed establis hing a European Coal and Steel Community (ECSC). Its production is dealt under the high authorities of the union.II. guard and securityTo make the region work suitable to work, business and the living standards, lots of efforts are under observations specially the effort of combine work of the jurisprudence from different countries are the effort to pertain any terrorist activities. Hence this was also the very strong point to work in the area from the growth point of view in strategic thinking.III. Economic and social solidarityBasically it is made to bring change in political stability and solidarity but now EU has become the icon of economic and social solidarity as a rapid and fast growth is going on.To meet their contingencies the EU made funding to meet any future unexpected loss. Thus providing break up access to outlying regions and boosting trans-European trade.IV. ValuesEU stands for a view of humanity and a model of participation that the great majority of its citize ns support.The Davis decided to grow its industry in the EU (European Union) Market. It sold other parts of the business to put more effort to make textile business well especially in the market like EU. This allows company to re-invest their profits and expanding the business.(Swann, D., 1992)Q no. 4If the company were to expand into new areas of the globe, where would you barrack and why? What factors might encourage or discourage this choice?Which areas would be more focused or suitable for the companys expansion?If the company has to expand somewhere in the near future, to me it will be expanding the china market because the market in china is having a lot of scope even more than the European Union market.Factors that encouraging the choice of expandhere I am going to talk about the important factors which are necessary in the expansion of any company weather it is the type of integrations (vertical or horizontal), besides the thinking of merging and taking over we are to discu ss some of the factors which can be effective in making the expansion use full as I discussed above the market which I think is most suitable worldwide for the expansion of the business.Davis needs to see some company at china for merging or taken over as the Chinese companies also will be quite very much cheaper than the rest of the world .Factors discouraging the choice of expandGlobally managing the staff is quite a big problem as the distance of china and Britain is very far.The timing difference according to me is the biggest problem in the assessment of efficiency of work and better communicationDue to big difference in the region the shipment charges can cost high.Q.5 how would you advice the company to go about making a decision on their strategic choice?Companys choice of making decision should be strategicWhen a company forms it is passing from the different several phases at the time when it reaches to its peak in term of business development as well as profit ability and the market grip. The strategically near of the business tells to do the expansion hence if the company like Davis Service Group which was the market leader in its field which I already discussed in early tasks of the report.If we see that choice of making decision towards the expansion of the business in some new market, it could be either the emergence of new system or merging/ taking over to some already working firm. Hence in both cases the major discussion is that, the decision of expanding the business in some new market is strategic. Being an analyst we have to make sure that all the strategies should work together to improve the position of the business.Suggestion in making strategic choice, could they do expansion or notIf the company suppose going to take the decision for expansion in some new markets they have to make few points very fleet from the top to bottom. Means the company should have first of all resources to buy share or to merge the other company (resources i nclude all the expenses even after buying the business), market situation should be already favour able to company even if need of improvement is in that respect. evidence to observe the few positive aspects of the business expansion try to go to a reason able place to expand. Try to grab either new market where no similar sort of business done before or find someplace where the chances of the growth are expected more as per reason of experience (Market like china providing good development chances).The question that could they do that expansion or not are very important to be understand because the phenomenon of expansion is really belong to the present condition of the market situation. Hence present market situation of the company is quite very good the market grip of company over the business is too strong nothing wrong can be said because there share price also rises all the sectors where the company is working, the work is going very efficient following diagram could show us the clear view of situation of the company.(Johnson, G. and at all, 2008)Q.6 As a strategic consultant to the company, what other or alternative strategic measure would you have recommended to the company and why?Recommendation to the company at strategic point of viewThe company though is working efficiently along with that the areas where the company makes its decisions to get more growth is work ware uniforms 33%, hotels and restaurants 19%, health ware 29%, facilities 10% and sales and production is 9%. Hence the company is working in this kind of situation where it needs to make a concentration on so many things together at a time/ multi tasks like that but in the same nature of the business.Compete successfully The competition with the other competitors of the business either the big one or sets of small ones is very necessary such business strategies should come under considerations so that the market situation is all the time become under control of the company and hence th e market capturing factor of some other company to grow also be kept under consideration to it.As a strategic consultant of the companyAs a strategic consultant of the company we have to follow few main points through which we can offer the company few good choices to make it well in its work.Suppose the company is working all over well but there is one competitor arose to the market and becoming famous. Basically that happens because of the bad policies and not to having a good eye on the competitors activities, so the analysis for the competitor is very much give notice able on the routine basis. Like the company Pepsi and coca cola almost making the same sort of brand cold drink and there is very tight competition between those two.For meeting this level of observation the company must work hard even in order to look what is happening in the competitors mind as well as analyze it at early stage and try to rectify it with their better policies.ReferenceFlouris, T. G. And Oswald, S. L. (2006), Designing and executing strategy in aviation management, Ashgate Publishing, Ltd.Price, V. C. and at all (1999), The enlargement of the European Union issues and strategies, RoutledgeSwann, D. (1992), The Single European market and beyond a study of the wider implications of the Single European Act, Taylor FrancisJohnson, G. and at all (2008), Exploring Corporate Strategy, Pearson Educationwww.entrepreneur.com/startingabusiness/businessplans/article38308.htmlixzz0LVWlPcRU assessed on thirteenth July 2009www.twst.com/notes/articles/lys024.html assessed on 13th July 2009www.strategicgrowthconcepts.com/services/Business-Information-Articles_I33/Article-The-Elements-of-the-Business-Plan_A30.html assessed on 13th July 2009www.digitallook.com/companyresearch/10168/Davis_Service_Group/company_research.html assessed on 13th July 2009www.development.thetimes100.co.uk/case-studydavis-service-group111-278-0.php assessed on 13th July 2009