Companies that Used Alternative Strategies

Forward Integration
Amazon
Amazon’s purchase of whole foods is one of the highest profile examples of forward integration strategy in the current
years.

Amazon publishes book itself as well as provides a publishing platform for independent writers.

It also has its own transportation (Amazon Transportation Services) and distribution which is forward and backward
integration-toward suppliers-and forward integration because Amazon directly delivers to the end users.

This Whole Foods acquisition is an example of forward integration strategy, which serves as brick and mortar Whole
Foods outlets for Amazon. The Whole Foods outlets act as places to sell its products or have the customers pick them up
at their convenience.

Amazon was already in the grocery business in a small way but this acquisition made Amazon a top player in the market.
Shares of traditional food retailers fell to new lows because Amazon has the potential to shake up the industry.

Similarly, DELL sells online directly to the customers and Apple has its own stores to reach out to the customers which
are also good examples of forward integration strategy.

Vertical Integration
Coca Cola
All bottling partners work closely with customers -- grocery stores, restaurants, street vendors, convenience stores,
movie theaters and amusement parks, among many others -- to execute localized strategies developed in partnership
with our Company.

Customers then sell our products to consumers at a rate of more than 1.8 billion servings a day.

This vertical integration increases operating effectiveness and efficiency by combining the current manufacturing and
distribution capabilities into one unified organization.

These changes strengthen Coke's commitment to work toward sustainability and provide an opportunity for further
momentum in North America.

In January 2006, Company-owned bottling operations were brought together to form the Bottling Investments operating
group, now the second-largest bottling partner.

In April 2007, partners met to discuss the development of a core set of performance indicators for the Coca-Cola system.

Bottling partners produce their own corporate responsibility reports which can be viewed in the Sustainability Reports
section.

Coca-Cola manufactures and sells concentrates, beverage bases and syrups to bottling operations, owns the brands and
is responsible for consumer brand marketing initiatives.

Our bottling partners manufacture, package, merchandise and distribute the final branded beverages to our customers
and vending partners, who then sell our products to consumers.

Backward Integration
Company ABC
Company ABC is a manufacturer of frozen food and seeks to acquire one of their suppliers who owns a poultry
processing plant. By acquiring the poultry processing plant, the company will be able to control the cost of production,
the quality of raw materials, and the quality of the produced food.

Furthermore, the company will be able to differentiate its products from its competitors as by assuming control over the
supplier it will hinder competitive companies from buying supplies from the poultry processing plant. In doing so, the
company will control the scarce resources and the raw materials, but also its costs due to the economies of scale.
Therefore, with backward integration, a firm controls its supply chain, lowers its costs and controls the raw materials,
while hindering the access of competitors to these raw materials.
Horizontal Integration
Because Pepsi bought a company that exists further along its supply chain, this is clearly vertical integration.
That is, Pepsi bought a company that it could supply directly with Pepsi products. We can think of Pepsi's
supply and distribution chain as a vertical series of companies: all of the companies Pepsi sources materials
from that it uses in production along with all of the companies that distribute and sell Pepsi products.
Expansion in either direction along this chain is vertical integration, whereas horizontal integration would be
buying up competitors—in this case, other companies that produce sodas, sports drinks, and the other goods
Pepsi produces.