1 to 6 indicate when forward integration may be an especially effective strategy 1 An organizations present distributors are especially expensive, unreliable, or incapable of meeting the firms distribution needs 2 The availability of quality distributors is so limited as to offer a competitive advantage to those firms that promote forward integration 3 An organization competes in an industry that is growing and is expected to continue to grow markedly this is a factor because forward integration reduces an organizations ability to diversify if its basic industry falters 4 An organization has both the capital and human resources needed to manage the new business of distributing its own products 5 The advantages of stable production are particularly high this is a consideration because an organization can increase the predictability of the demand for its output through forward integration 6 Present distributors or retailers have high profit margins this situation suggests that a company could profitably distribute its own products and price them more competitively by integrating forward Fill in the correct answer 1 6 to below table In a forward integration move, Coca Cola recently signed a 10 year partnership with Green Mountain Coffee Roasters, maker of the Keurig single serve coffeemaker, to offer for the first time a Coca Cola drink through a K Cup Coca Cola thus plans to sell Coke through the at home beverage system Keurig K Cup With the partnership, Coca Cola also acquired 10 percent of the Green Mountain company for about $1 25 billion Green Mountain now has a similar partnership with Campbell Soup to brew a cup of chicken broth in a K Cup Based in Cincinnati and having more than 2,600 grocery stores, Kroger recently acquired Viatcost com to expand its push into online groceries, partly so as not to concede the same day food delivery market to Amazon com FedEx and UPS are both using forward integration, paying the United States Post Office (USPS) to ship their packages Today, USPS delivers about 2 5 million packages daily for FedEx, or about one third of FedExs express mail U S bound mailings Amazon is forward integrating into the installation business When you buy, for example, a ceiling fan or car stereo from Amazon, the company now wants to install it for you for a feeat least in three cities (Los Angeles, New York, and Seattle) Amazons new program is called Amazon Local Services and is another step by the company to erode brick and mortars 90 percent market share of retail sales in the United States In addition, Amazon is developing a new mobile application that recruits and pays ordinary people to be carriers of packages as they travel, doing away with the need for FedEx, UPS, and even the United States Postal Service This new Amazon forward integration strategy is known as On My Way and is still being tested to resolve potential issues such as what happens if the package is damaged, or even stolen, by the transporter An effective means of implementing forward integration is franchising Approximately 2,000 companies in about 50 different industries in the United States use franchising to distribute their products or services Businesses can expand rapidly by franchising because costs and opportunities are spread among many individuals Total sales by franchises in the United States are annually about $1 trillion There are about 800,000 franchise businesses in the United States However, a growing trend is for franchisees, who, for example, may operate 10 franchised Restaurant chains are increasingly being pressured to own fewer of their locations For example, TGI Fridays recently sold its 250 company owned restaurants in the United States to franchisees as well as its 63 company owned restaurants in the United Kingdom Applebees also is becoming much more a franchisee owned business Burger King is converting virtually all of its company owned outlets to franchised operations, with revenue from franchisees going from 30 percent of sales in 2011 to 90 percent in 2015 This change results in a drop in Burger King revenues, since franchisees show revenues on their own personal income statements In contrast, rival Yum Brands owns virtually all of its outside U S restaurants and says that policy gives greater control and benefits if things go well (or bad)

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1 to 6 indicate when forward integration may be an especially effective strategy: 1. An organizations present distributors are especially expensive, unreliable, or incapable of

1 to 6 indicate when forward integration may be an especially effective strategy:

1. An organizations present distributors are especially expensive, unreliable, or incapable of meeting the firms distribution needs.

2. The availability of quality distributors is so limited as to offer a competitive advantage to those firms that promote forward integration.

3. An organization competes in an industry that is growing and is expected to continue to grow markedly; this is a factor because forward integration reduces an organizations ability to diversify if its basic industry falters.

4. An organization has both the capital and human resources needed to manage the new business of distributing its own products.

5. The advantages of stable production are particularly high; this is a consideration because an organization can increase the predictability of the demand for its output through forward integration.

6. Present distributors or retailers have high profit margins; this situation suggests that a company could profitably distribute its own products and price them more competitively by integrating forward.

Fill in the correct answer 1-6 to below table.

In a forward integration move, Coca-Cola recently signed a 10-year partnership with Green Mountain Coffee Roasters, maker of the Keurig single-serve coffeemaker, to offer for the first time a Coca-Cola drink through a K-Cup. Coca-Cola thus plans to sell Coke through the at-home beverage system Keurig K-Cup. With the partnership, Coca-Cola also acquired 10 percent of the Green Mountain company for about $1.25 billion. Green Mountain now has a similar partnership with Campbell Soup to brew a cup of chicken broth in a K-Cup.
Based in Cincinnati and having more than 2,600 grocery stores, Kroger recently acquired Viatcost.com to expand its push into online groceries, partly so as not to concede the same-day food delivery market to Amazon.com. FedEx and UPS are both using forward integration, paying the United States Post Office (USPS) to ship their packages. Today, USPS delivers about 2.5 million packages daily for FedEx, or about one third of FedExs express-mail U.S.-bound mailings.
Amazon is forward integrating into the installation business. When you buy, for example, a ceiling fan or car stereo from Amazon, the company now wants to install it for you for a feeat least in three cities (Los Angeles, New York, and Seattle). Amazons new program is called Amazon Local Services and is another step by the company to erode brick-and-mortars 90 percent market share of retail sales in the United States. In addition, Amazon is developing a new mobile application that recruits and pays ordinary people to be carriers of packages as they travel, doing away with the need for FedEx, UPS, and even the United States Postal Service. This new Amazon forward integration strategy is known as On My Way and is still being tested to resolve potential issues such as what happens if the package is damaged, or even stolen, by the transporter
An effective means of implementing forward integration is franchising. Approximately 2,000 companies in about 50 different industries in the United States use franchising to distribute their products or services. Businesses can expand rapidly by franchising because costs and opportunities are spread among many individuals. Total sales by franchises in the United States are annually about $1 trillion. There are about 800,000 franchise businesses in the United States. However, a growing trend is for franchisees, who, for example, may operate 10 franchised.
Restaurant chains are increasingly being pressured to own fewer of their locations. For example, TGI Fridays recently sold its 250 company-owned restaurants in the United States to franchisees as well as its 63 company-owned restaurants in the United Kingdom. Applebees also is becoming much more a franchisee-owned business. Burger King is converting virtually all of its company-owned outlets to franchised operations, with revenue from franchisees going from 30 percent of sales in 2011 to 90 percent in 2015. This change results in a drop in Burger King revenues, since franchisees show revenues on their own personal income statements. In contrast, rival Yum Brands owns virtually all of its outside-U.S. restaurants and says that policy gives greater control and benefits if things go well (or bad).