Integration Strategies
Forward Integration
Strategy that seeks to gain ownership or increased control over distribution or retailers. A benefit is that manufacturers can reduce steps in the distribution process.
Since Taitea does not need another company in order to make the distributions its service, the company is not going to implement that strategy. The firm is going to take care itself of its own distribution process.
Backward Integration
Strategy that looks for the ownership or increased control of its suppliers. Some advantages are:
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Increased control: Companies can control their value chain in a more efficient manner.
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Cost Control: Costs can be considerably controlled all along the process.
Taitea is not going to pursue this strategy, because it does not have neither the capital nor the human resources to manage the supplying of its own raw materials.
Horizontal Integration
Refers to a strategy seeking ownership or increased control over competitors.
The increased use of horizontal integration nowadays is translated as a growth strategy for firms.
Takeovers among competitors allow for increased economies of scale and enhance transfer of resources and competences.
TaiTea Company will not peruse this strategy, because it is not the main purpose to gain control over competitors. As a small company the main objective of the firm is to try to get well known among customers for the good quality of products that we offer. Also there are few direct competitors.
Intensive Strategies
Market Penetration
We can use this strategies to increase the volumen of sales in our products. Some activities to use could be advertisment because in that way the customers will know more about us, with lower prices once a month, or sales by volumen discounts. The idea is increase our sales to make us more money over the course of the year.
Market Development
Introducing present product or services into a new geographic area. There are different guidelines that indicates when market development may be an especially effective strategy for organizations
The TaiTea Company will be focused first on Bogota, and depending on the results we obtain in terms of profitability and success, we will consider having a market development strategy.
Neither the company has the capital or human resources to manage expanded operations at this moment because we are just beginning to be recognized in the market.
With this strategies, we have two option
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Market resarch
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Segmentartion analysis
For segmentation analysis we need to take into account:
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Demographic
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Geographic
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Values and lifestyle
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Product-benefits lines
Those are a small slice of an overall market and see which kind of location we can be and increase our market development.
Also, we have to creat a promotional strategy to penétrate the new market
Product Development
Strategy thatt seeks increased sales by improving present products or services or develpoing new ones.
This strategy for our company is really important due to the fact that our priority is to satisfy our customers needs and desires that are constantly changing. This will also help us increase our sales because we are attracting ne customers.
The Taitea Company each month will improve and innovate its central product by bringing different flavors and sensations to our consumers.
Diversification Strategies
Realted Diversification
Adding new but related products or services; a process that takes place when a business expands its activities into product lines that are similar to those it currently offers
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Taitea will be adding new tea flavors to keep our customers amazed.
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Taitea will make different kind of service to our customers can take part in the development of their tea
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Taitea can add new glasses where customers can experience new ways to drink tea
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Taitea by making changes, adding new stuff into their stores can access to new customers that like this new products and services.
Unrealted Diversification
Adding new, unrelated products or services; strategy where companies expand their operation into markets or products beyond current resources and capabilities
The company will not use this strategy since we are just begining to operate in the market. Taitea will be focus on their principal product. Bubble Tea.
Defensive Strategies
Our company will not use this defensive strategies since Taitea it just beignig to be settle in the market. Depending on the succes of the comapny, through time we will be analyzing this strategies.
Retrenchment
Retrenchment is regrouping through cost and asset reduction to reverse declining sales and profit. In our case, If we do not generate profits, we would have to cut spending. In principle, we would have to cut spending a barista. In extreme cases, the manager would have to occupy the position of barista.It is an event that we do not wish to have in our company.
disinvestment.
Disinvestment
Selling a division or part of an organization have an enough impact in the team. The sale of part of the organization, is spoken in our group. Each member has an equal share in the company. If any part is sold, the money among the other members of the company is divided, as long as the group see the new person in the group is suitable for equipment.
Liquidation
Basically is the selling of a company's assets, in parts, for their tangible worth. In our company, mainly settlement would begin to pay all of our employees, and then try to sell the assets of the company or someone wants to buy our product idea.
