Replay paper on Strategic Management |Business Finance – Management

Replay paper on Strategic Management |Business Finance – Management

chose at least 4 posting and reply in atleast 75 words for each follow-up response thus include critical analysis, and be supported by the relevant in-text citations and reference sources.

That will be a total of 4 paragraphs

chose any activity but at least two replies for activity 1 and two replies for activity 2

Matrix shows a relative attractiveness of the market penetration strategy, providing objective basic for future unit-specific strategies that could potentially lead the corporation to success. This optimal strategy would be adequate for the corporate’s future activities for these reasons:

1. Industry expansion reflects the attractiveness an industry and the discovered potentialities in it. By acquiring new customers using the existing services, CMA CGM may increase its sales growth in its existing markets to gain a higher market share.

2. In emerging markets, gaining new market shares from existing services can secure a competitive advantage such as brand power which can be reliable, to some extent, for sustaining that competitive advantage and reach new growth rates to increase profits and facilitate corporate expansion.

3. The market penetration strategy may also help the corporation better understand its competitive environment. Because the corporation will be aiming at the existing markets using existing products, the strategy will also have a focus on the competititors to determine their number and their level of competitiveness. Answers to these interrogations will influence how aggressive the corporation needs to be face to the competition.

References:

Week 5 Readings and Audio.

CMA CGM Official website: https://www.cma-cgm.com/the-group/about- us/presentation

Week 5 -LA 2- Alternatives… (14.4 KB)

https://www.cma-cgm.com/the-group/about-us/presentation
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Week 5 – LA 1 – ADiaw Alioune Diaw posted Feb 9, 2018 3:32 AM Subscribe

Learning Activity 1:

CMA CGM evolves in the container shipping industry. Last week’s analysis defined that the corporation highly follows a differentiation strategy as its generic

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business strategy basing its source of competitive advantage in uniqueness of their delivered services which facilitates targeting a broad market for their scope of operations; as stated in their visions and values. This program has given the organization access to international markets with access to new customers, especially in Africa and Asia, lowered transportation and delivery costs and diversified the Business Risk. Only 6% of its employees are working with the corporation in its home country, France. (cma-cmg.com)

Thus, to maintain its posture as the third worldwide leading shipping group and an economic player, the corporation may need to implement corporate-level strategies to achieve and sustain the main differentiation strategy. The following may be considered:

Product development or the creation of new services to attract new customers in the existing market. This strategy especially can be effective in the almost saturated industry and with future expansions forecasted. Market development. CMA CMG may propose their existing services to new markets. This will increase the potentiality to reach new geographic areas (for instance, have access to more African and Asian commercial ports), together with an expansion of the shipping routes and a lowering of shipping costs in the long run. Market penetration. The expansion of the container shipping industry will most likely encourage this concentration strategy as it increases chances of fast losing organization’s competitive advantage. To gain additional market share, the corporation may advertise its existing services or mission statement to gain new customers, either new to the market or existing that were the competition’s customers. Horizontal integration. Another strategy that CMA CGM could implement is the acquisition or merger of/with new businesses. This method will ultimately lower costs of services by achieving greater economies of scale. (The Saylor Foundation, 2014). Another example of horizontal integration would be alliances which tighten competition around members of the alliance, gives access to new shipping routes (distribution channels) and serve to block new entry to markets, together making the industry more profitableless

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Learning Activity#2 Caitlyn Gordon posted Feb 7, 2018 6:47 PM Subscribe

*** QSPM is attach**

The QSPM is an effective tool to understand which strategy, where it be at a business or corporate level, is the best fit for the organization at the present (“Quantitative Strategic Planning Matrix (QSPM)”, n.d.). It compares and contrasts multiple strategies with weighted scores that pertain to that corporation. The total sum of attractiveness score, calculated from weighted scores from IFE matrix and EFE matrix and their corresponding AS (attractiveness score) are numerical proof of which strategy is better or worse for company. The enormous size of GSK pharmaceuticals has a high risk to not make effective decisions for the entire corporation. Using the QSPM as one the many tools to make a decision for the corporation ensures the company remains objective in making the company’s goals.

From the QSPM above for GlaxoSmithKline , you can immediately tell that product development is the best corporate level strategy for the company. Product development strategy for GSK means expanding its current products in their consumer healthcare and pharmaceutical lines. Currently, GSK has the potential to expand its consumer healthcare lines with its tooth hygiene products. The hygiene line is is gaining strength globally. It was ranked number one for oral health specialist in fifty markets (“Quick Facts”, 2017). This notoriety brings brand recognition which will allow for profitable product development.

Quick Facts. (2017). Gsk.com. Retrieved 7 February 2018, from https://www.gsk.com/media/3646/gsk-quick-facts.pdf

Quantitative Strategic Planning Matrix (QSPM). MBA Tutorials. Retrieved 7 February less

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Last post yesterday at 12:40 PM by Caitlyn Gordon

Learning Activity#1 Caitlyn Gordon posted Feb 7, 2018 6:43 PM Subscribe

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GlaxoSmithKline LLC, GSK,. is using its brand recognition and high market share to focus on product differentiation. The product differentiation for GSK are vaccines, pharmaceuticals (prescriptions), and consumer healthcare. To take that generic strategy a step forward, the company needs to hone in on few different strategies:

Corporate level Strategy:

1. Market Penetration- expand the market in the United States and East Asia 2. Market Development – bring the European consumer healthcare products to the US market 3. Product Development 4. Related Diversification -economies of scope

The suggested corporate level strategies will advance the generic strategy of increasing brand recognition and differentiation. GSK needs to explore different possibilities with social media and advertising in their US and Asia market. GSK’s main market is in the UK and it is slowing pushing its way into the US and Asia. The competition in both market, especially the US market is fierce. The company needs to gain brand recognition through strong marketing campaigns of its current products ( Strategic Management, 2014, Leading Strategically, p.138).

Through this market penetration, there needs be market development. American’s are always looking for new products and or effective products to instantly fix their issue. GSK has number of products that are not allowed in the United States for various reasons such as, patents not being accepted, stricter pharmaceutical regulations, and various government legalities. These should not be a reason to not have these products offered in the US or other markets. GSK should start working with the governments of specific countries and start offering these products to gain more market share. It could potentially bring a number of new consumers to GSK. Now with that being said, there needs to set of financial benchmarks or mile-marker to ensure that there is fair amount of money being spent on getting those products into the market (Morello, n.d.).

Consumers are always looking for new and better forms of their prescription (pharmaceuticals), vaccine, and development. GSK needs to improve on their product development with diversification. It is slowly building its consumer healthcare sector, especially in the US. The sector, as whole, brought in 7.2 billion British pounds in 2016 (“Quick Facts”, 2017). It needs to start increasing its vaccine and pharmaceutical products for the US and Asia market. Pharmaceutical industry itself is a very unknown industry to the average consumers. GSK could use their growing consumer healthcare market share in the US and create affordable and high quality forms of medicine and consumer healthcare products for the US and Asia market. This is related diversification, bringing new products to the existing base of consumers( Strategic Management, 2014, Leading Strategically, p 257). Consumers are more willing to purchase from companies that they know and trust from not just one product. If the consumer knows the company is successful and reputable with on product, they are more inclined to purchase another product from them.

Resources:

Morello, R. What is Marketing Strategy Development?. Smallbusiness.chron.com. Retrieved 7 February 2018, from http://smallbusiness.chron.com/marketing-strategy-development-58521.html

http://smallbusiness.chron.com/marketing-strategy-development-58521.html
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Quick Facts. (2017). Gsk.com. Retrieved 7 February 2018, fromhttps://www.gsk.com/media/3646/gsk- quick-facts.pdf

Strategic Management. (2014). Leading strategically. Washington, D.C.: The Saylor Foundation. Pages 241/257

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Last post yesterday at 12:30 PM by Jared Ubben

LA 1 Cassandra Caster posted Feb 8, 2018 2:29 PM Subscribe

The company that I have been using in past discussions is Bergey Wind Power. Bergey Wind Power is a company that specializes in small wind turbines for homes, farms and small businesses (Bergey, n.d.). In last week’s discussion, I determined that the generic strategy that Bergey should continue to focus is differentiation. The essence of a differentiation strategy is separating the product of a company from its’ competitors. One corporate-level strategy that Bergey could pursue is a diversification strategy. The diversification strategy will allow Bergey to branch off and enter other markets to gain new business. Bergey could look towards creating a business friendly model for larger corporations, or models that can be used with neighborhood smaller-businesses. This will allow Bergey to compete with some of their larger competitors.

Other strategies that Bergey could pursue are concentration strategies. Concentration strategies will allow Bergey to be able to better compete in the wind industry. In using a concentration strategy, Bergey can use product development, market penetration and market development as part of its’ efforts to excel within the industry (Strategic Management, 2014). In order to expand their customer base and increase brand loyalty, Bergey can focus on increasing the demand for wind turbines while creating a plan for market and product development.

References

https://www.gsk.com/media/3646/gsk-quick-facts.pdf
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LA 2 Cassandra Caster posted Feb 8, 2018 2:28 PM Subscribe

In the chart below, I have compared my four strategies: market development, diversification, product development and market penetration. The strategy that earned the highest attractiveness score was market penetration. Bergey already contains the best warranty in the wind turbine industry. As they continue to improve and develop their wind turbines, Bergey will continue to win over customers and penetrate the market deeper and hold a higher value of market share. As wind energy continues to develop, customers will start looking at turbines and companies that have a great reputation.

Market Development

Diversification Product Development

Market Penetration

Factors Weight A.S Total A.S

A.S Total A.S A.S Total A.S A.S Total A.S

O- Increased Awareness for Environment

0.20 4 0.80 3 0.60 4 0.80 4 0.80

O- Tax Credits

0.15 4 0.60 2 0.30 1 0.15 3 0.45

O- EPA Limits on Power Plants

0.15 3 0.45 2 0.30 1 0.15 1 0.15

O- Potential Market Growth for Farmers

0.05 3 0.15 4 0.20 4 0.20 2 0.10

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O- Government’s willingness to turn to wind energy

0.15 2 0.30 3 0.45 2 0.30 4 0.60

T- Increasing shipping costs

0.10 2 0.20 2 0.20 2 0.20 3 0.30

T- Availability and amount of advertising for solar power

0.15 1 0.15 2 0.30 2 0.30 3 0.45

T-More Competition

0.05 3 0.15 4 0.20 4 0.20 4 0.20

S-“Wind School”

0.10 2 0.20 1 0.10 1 0.10 3 0.30

S- International Projects

0.15 3 0.45 4 0.60 2 0.30 4 0.60

S- Variety of products

0.15 3 0.45 4 0.60 4 0.60 3 0.45

S – Longest warranty in industry

0.30 4 1.20 4 1.20 4 1.20 3 0.90

W-Certified d l d dless

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LA #2 Danielle Hardy posted Feb 8, 2018 6:58 PM Subscribe

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LA #1 Danielle Hardy posted Feb 8, 2018 6:55 PM Subscribe

1. Macure Pharma could use the disruptive innovation strategy to outperform their competitors. This strategy would require the company to create a new process for formulating their specialty blends of pharmaceuticals. This would allow them to manufacture their products cheaper, while still selling at their premium costs, will increase their profit margin (Strategic Management, 2014).

2. Alternately, Macure Pharma could implement the Blue Ocean strategy and create a new segment in the pharmaceutical market. This would require them to use their research and development capabilities to manufacture a new drug that the public is not aware that they need. Demands will rise, along with profits (Strategic Management, 2014).

3. A third option would be to create a strategic alliance with, or acquire as a subsidiary, another pharmaceutical manufacturer in the market. An acquisition would be more beneficial for the company’s generic strategy. Macure Pharma

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Learning Activity 2 Darren Carroll Darren Carroll posted Feb 8, 2018 9:17 PM Subscribe

Note: Last week an error was discovered in the scores of the EFE and IFE thus throwing off the IE matrix. After learning of the errors, reevaluations and calculations were made to correct these errors. Some weights might vary from the former incorrect IE matrix.

QSPM – Orion Pharma

Key Factors Horizontal Integration

Forward Vert. Integration

Back Vert Integration

Internal Strengths Weight AS TAS AS TAS AS TA

Global Company 0.2 4 0.8 3 0.6 1 0.

Multiple Market Segments 0.2 4 0.8 3 0.6 1 0.

Market Leader 0.2 – – –

Internal Weakness

Complacency 0.2 2 0.4 1 0.2 3 0.6

Limited Distribution 0.11 – – –

Visionary Leadership 0.09 2 0.18 1 0.09 3 0.2

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1

External Opportunities

Underdeveloped Markets 0.1 4 0.4 3 0.3 1 0.

Generics 0.1 4 0.4 2 0.2 3 0.

Economic Development 0.1 4 0.4 3 0.3 1 0.

Partnerships 0.15 3 0.45 2 0.3 1 0.1

Distribution Channels 0.1 3 0.3 4 0.4 1 0.

External Threats

Government Regulations 0.09 – – –

Partners in other markets 0.08 3 0.24 4 0.32 1 0.0

Expiring Patents 0.09 3 0.27 4 0.36 2 0.1

New entrants in generics 0.1 4 0.4 3 0.3 2 0.

Litigation and law suits 0.09 – – –

1

Total 5.04 3.97 2.4

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The Quantitative Strategic Planning Matrix (QSPM) is a tool used to assist organizations in determining which strategy a company should focus on to best achieve a desired direction of the organization. (David, David & David, 2009, The quantitative strategic planning matrix (QSPM) applied to a retail computer store, p. 42)

David (et al., 2009, The quantitative strategic planning matrix (QSPM) applied to a retail computer store, pp. 48-51) lists the steps to properly utilize the matrix as:

1. The matrix consists of key factors from the EFE, IFE, SWOT and IE, along with the weights used in the referenced matrix. They should be listed in the key factors and weight columns respectfully.

2. An Attractiveness Score (AS), 1 – 4 with 1 being the lowest and 4 being the highest, is given to each key factor. All strategies are scored row by row, not repeating the score. If one item is deemed as having no effect on the strategy and not scored, then the same row in all strategies be not graded or dashed out.

3. The product of the weighted key factor and the AS becomes the Total Attractiveness Score (TAS).

4. A TAS of the key factors for each strategy will be made and placed at the bottom of the matrix. The highest sum indicates which strategy should be the most attractive over other strategies.

The QSPM for Orion Pharma indicates the Horizontal Integration is the most attractive as indicated by the higher TAS. Horizontal Integration simply means to acquire or merge with other companies in the same market. (Strategic Management, 2014, Selecting Corporate-level strategies, p. 245)

Horizontal integration for Orion Pharma can be easily achieved in two areas of the market in which it has already proven to be a leader in; the animal health and generics. Orion welcomes the creation of meaningful partnerships that improves research and development, because such partnerships help keep cost low and increased revenues. This is an enabler of Orion’s strategy of cost leadership. Through partnerships Orion can identify organizations that might benefit from a merger, in particularly smaller organizations that cannot bear the cost of research and development.

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Orion’s global presence should create opportunities to merge with smaller companies that can lend to Orion entering underdeveloped markets, increasing sales in generics and finding new distribution channels for all its products. Additionally, through mergers, Orion can eliminate competitors and new entrants to the generic market. Likewise, in the animal health market, Orion can establish brand presence and social responsibility, which goes a long way in today’s market place. Why social responsibility, simply because Orion can establish a trust with pet owners as well. It is good to know that pharmaceutical companies not only value human life but animal life as well.

Learning Activity 1 Darren Carroll Darren Carroll posted Feb 8, 2018 9:11 PM Subscribe

Orion Pharma is positioned well in a vary of segments in the North European pharmaceutical market. This did not happen by accident, but through good leadership. Some of the accomplishments of the company are:

A very lucrative generic market; Animal health and wellbeing products (Orion, n.d. a, Organisation, para. 3) Provided of contract manufacturing; Suppliers of active ingredients (Orion, n.d. b, Products and services) Encourage partnerships (Orion, n.d. c, Partnering, para. 3)

Such a stance as this creates possibilities and corporate level strategies for growth and brand awareness. Among the various possibilities of strategies, a few rises to the top as being a best choice to help the company growth in the industry and brand. They are:

Horizontal integration Forward vertical integration Backward vertical integration

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Related Diversification

Horizontal integration is simply a merger or acquisition of another company in the same market space. (Strategic Management, 2014, Selecting Corporate-level strategies, p. 245) The areas that present the best opportunity for this is in the animal health and partnerships. Orion can help build brand through acquisition of smaller, possibly distressed animal pharmaceutical manufactures. Visibility of the brand increases and hopefully market share. And through the open partnerships Orion could pick and choose a company that would best serve as an extension of their own efforts for merger. If Orion should expand across the market, the company could set the prices at the mark best suited for them and others would have to match them.

Forward vertical integration occurs when a company takes on the buyer’s position in the value chain. (Strategic Management, 2014, Selecting Corporate-level strategies, p. 254) The possibilities of such a direction would be in distribution channels. Currently, Orion does not own any form of distribution channels: regional distributors or pharmaceutical retail stores. A market penetration such as this could possibly cause a loss of sales to smaller companies opening gateways for horizontal integration.

Backward vertical integration is when a company plays the part of the supplier. (Strategic Management, 2014, Selecting Corporate-level strategies, p. 254) This should not be very hard, because Orion is a manufacture of pharmaceuticals and supplier of active in ingredients. The backward vertical integration should be focused on the value chain beyond the company’s capabilities in the raw material areas. If such integration should occur, Orion could foreseeability own the entire value chain, from raw materials to consumer. What a boost in brand and market take domination as the company could set the price points controlling the industry.

Related diversification is when a company moves into a market that has close ties to the current market. (Strategic Management, 2014, Selecting Corporate-level strategies, p. 256) Orion can use this diversification strategy to enter into the animal wellness and insurance market. A move such as this would be pointed at building the brand and increasing profits to allow lower price levels in areas such

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as generics. Using or recommending their own products will help the company grow and could mean increased profits.

Orion is well position in the industry with the potential to gain market share through various corporate level strategies if so desired. All of the strategies would lend to increased revenues from competitors and other buyers, while Orion can feasibly reduce cost on the larger more lucrative products, applying pressure to competitors.

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Week 5 – LA2 – Stevens Donna Stevens posted Feb 8, 2018 9:45 PM Subscribe

General Electric: Quantitative Strategic Planning Matrix (QSPM)

Below outlines the Quantitative Strategic Planning Matrix (QSPM) developed for General Electric.

Key Internal Factors Market

Development

Market

Penetration

Forward Vertical

Integration Acquisition

Internal Strength Weight AS TAS AS TAS AS TAS AS TAS

1. Ample wind conditions

.05 – 0 – 0 – 0 – 0

2. Investor confidence .05 3 .15 2 .10 1 .05 4 .20

3. Funding .10 2 .20 2 .20 1 .10 4 .40

4. Brand recognition .15 3 .45 4 .60 3 .45 3 .45

5. Product portfolio .15 2 .30 3 .45 4 .60 4 .60

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Internal Weakness

1. Construction permit wait times

.15 – 0 – 0 – 0 – 0

2. High investment costs

.10 2 .20 1 .10 – 0 4 .40

3. Landscape/environmental impact

.10 1 .10 1 .10 – 0 – 0

4. Threat to animals in the region (e.g. fauna)

.10 1 .10 1 .10 – 0 – 0

5. R&D pipeline .05 2 .10 2 .10 2 .10 3 .15

1.0

External Opportunities

1. Wind .05 – 0 – 0 – 0 – 0

2. Implementing digital technology (specifically)

.20 2 .40 1 .20 1 .20 1 .20

3. Improved turbine designs

.10 3 .30 2 .20 2 .20 3 .30

4. Available land/location resources

.05 – 0 – 0 – 0 – 0

5. Available technology to support improvements and efficiency (all other)

.10 3 .30 2 .20 1 .1 – 0

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External Threats

1. Policy/Regulations .10 1 .10 1 .10 1 .10 1 .10

2. Environmental Community Opposition

.10 – 0 – 0 – 0 – 0

3. Connectivity issues to power grid

.10 – 0 – 0 – 0 – 0

4. Development of smaller wind turbines

.10 2 .20 1 .10 – 0 – 0

5. Animals (e.g. birds) .10 – 0 – 0 – 0 – 0

1.0 2.9 2.55 1.9 2.8

Key factors and their associated weighted scores from the IFE and EFE matrices were entered into the QSPM. An attractive score (AS) was assigned to each factor. A score of 1 to 4 was given, with 4 being the most important. (MBA Tutorials, n.d., para. 3). Dashes indicate no importance to the particular factor. The total attractive score (TAS) was calculated by multiplying the weight by the AS. The grand totals for each TAS is shown in the bottom row of the QSPM. The highest weighted scores was for market development, at a TAS of 2.9. Acquisition was second at 2.8, followed by market penetration and forward vertical integration, at 2.55 and 1.9 respectively. Therefore, market development was selected as the optimal strategy.

Within the market development strategy, brand recognition (a strength), was one of the highest weighted scores, at .45. External opportunities, such as implementing digital technology (TAS .40), improved turbine design (TAS .30), and making use of technology to improve efficiency (TAS .30), each align with product development that can improve the company’s profitability. The acquisition strategy, which came in a close second to the market development

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strategy, heavily relies on key strengths, particularly financial strengths as depicted by TAS between .20 and .60.

When an industry, such as the wind turbine industry, is dominated by a few global companies, there is less opportunity for companies to gain competitive advantage through economy of scale based on its brand alone. (Hansen & Nohria, 2004, para. 2). As a multinational corporation, GE can take advantage of a market development strategy, by having its various business units collaborate in an effort to increase capabilities Companies will fare well when they are able to developless

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Week 5 – LA1 – Stevens Donna Stevens posted Feb 8, 2018 9:44 PM Subscribe

General Electric: Corporate-Level Strategy

A focused differentiation generic business-level strategy was selected for General Electric’s (GE) wind turbine business unit. Businesses that use this type of strategy provide products and services to a narrow market. (Strategic Management, 2014 p. 159). The market is considered narrow because customers are specific to residential, commercial, and industrial. (Aghajani, Shayanfar, Shayeghi, 2015, p.308).

Corporate-level strategies

Market penetration, a concentration strategy, is selected for GE. With this strategy, GE will attempt to increase their market share with their existing wind turbine products. (Strategic Management, 2014 p. 241, para. 2). GE currently offers a full suite of wind turbines (GE, n.d. -a). Market development, described as marketing existing products in new markets, is a useful strategy for GE, because it will allow the company to save money on the research and development (R&D) of new products. (Strategic Management, 2014 p. 242, para. 1). Cost savings can go toward improving existing products, such as making select existing wind turbines more efficient. Forward vertical integration is depicted as a company becoming the retailer. (Strategic Management, 2014 p. 254, para. 2). Using this strategy, GE will be able to make a higher profit by selling their wind turbines themselves, versus having a retailer sell the company’s

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products. Another business-level strategy is horizontal integration, specifically acquisitions, which depicts a company that purchases another company. (Strategic Management, 2014 p. 245, para. 1) GE can acquire smaller, yet relatively successful wind turbine businesses in order to corner the market share. By a

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