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Give THREE reasons why businesses may use integration strategies.

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Reasons why businesses use integration strategies

  • Businesses use integration strategies when they want to expand their scope of operations.
  • Distribution channels of products are shortened/middleman is eliminated, therefore supply/distribution challenges are managed more effectively/Gain more control over the distribution channel.
  • Gain direct distribution by obtaining franchise/mergers/Take control of other businesses which produce/sell similar products/services.
  •  Access new markets.
  • New/Different products can be offered.
  • Creates an opportunity for synergy, e.g. two businesses achieve more when combining resources.
  • Reduce operating costs.
  • Less competition, as similar businesses in the market were taken over/ eliminated.
  • Ensure reliable flow of raw materials/finished goods at competitive prices.
  • Any other relevant answer related to reasons why businesses may use integration strategies.
answered by Master (629k points)