Forward integration and strategic management

Forward integration and strategic management
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Forward integration is a form of vertical integration that seeks to control product distribution in the supply chain and hence deal directly with customers. The organization may use subsidiaries to reach out to customers or it may result to consolidation in the supply chain (Hill & Jones, 2012). For instance, Apple Inc can sell their iPhones and laptops through their retail outlets. Thus, the distribution and retail stages of the supply chain are the main focus of forward integration where value is added for each successive stage. Improving operational efficiency, increasing control over distributors, in turn affect decisions on whether to adapt forward integration in light of rivals’ competitiveness.
Strategic management relies on analysis to maximize organizational effectiveness and decisions made are based on analysis. Thus, forward integration is linked to strategic management because organizations have the chance to cut on cos...