Alternatives to Collaboration: Horizontal and Vertical integration, Managing collaborator relations

24/12/2021 0 By indiafreenotes

Collaboration brings:

Providing Value: Working towards the same goal inspires in the team members with a strong sense of purpose. The team sees value in working together as the common goal gives them a meaningful reason to work together, along with receiving mutual benefits for the company as well as the team.

Brainstorming: Collaboration allows team members to come together on a common platform and work towards the achievement of a common goal by thinking, brainstorming, and offering various perspectives to provide solutions.

Equal Partaking: Collaboration provides every team member with equal opportunities to participate and communicate their ideas.

Horizontal Integration

The merger of two or more firms, which are engaged in the same line of business and their activity level is also same; then this is known as Horizontal Integration. The product may include complementary product, by-product or any other related product, competitive product or entering into the product’s repairs, services, and maintenance section.

Horizontal Integration reduces competition between firms in the market, as if the producers of the product get combined they can create a monopoly. However, it can also create an oligopoly if there are still some independent manufacturers in the market.

It is a tactic used by most of the companies to expand its size and achieve economies of scale due to increased production level. This will help the company to approach new customers and market. Moreover, the company can also diversify its products and services.

Vertical Integration

Vertical Integration is between two firms that are carrying on business for the same product but at different levels of the production process. The firm opts to continue the business, on the same product line as it was done before integration. It is an expansion strategy used to gain control over the entire industry.

Forward Integration:  If the company acquires control over distributors, then it is downstream or forward integration.

Backward Integration: When the company acquires control over its supplier, then it is upstream or backward integration.

Horizontal Integration Vertical Integration
Objective Increasing the size of the business Strengthening the supply chain
Capital Requirement Higher Lower
Strategy used to exercise control over Market Industry
Self-sufficiency No Yes
Consequence Elimination of competition and maximum market share. Reduction of cost and wastage.

Managing collaborator relations

Share the company’s mission over and over again. Everyone needs a reason to show up each day a cause to be part of, and a broader objective to work towards.

Defining your company’s mission is the first step towards bringing people together under one common goal and working together towards making it happen.

Communicate your expectation for collaboration.

Similarly, if your team doesn’t know that you want them to work together, you can’t expect them to do so. From the start, set your expectation for collaboration as a minimum standard. Even better, it should be part of your onboarding process so that potential recruits know you prioritize teamwork.

Promote a community working environment.

A sense of community is crucial for collaborative working environments. 54% of employees state that a strong sense of community led them to stay at a company longer than was in their own interests.

When people feel that their opinion matters, they are more likely to apply themselves more. Conversely, when people know their opinion doesn’t count for anything, they feel redundant and team-playing disintegrates.

Encourage Creativity.

A collaborative team is an innovative one. Likewise, creating the space for creativity will help foster collaboration. It’s a virtuous circle.

Brainstorming sessions can be a great way of opening up your team to creative thinking. An environment in which they can put forward and challenge ideas will help employees feel like they have a stake in the company’s mission.