Corporate Strategies adopted by

Companies
 Horizontal Integration: Disney & Pixar

• The Walt Disney Company was established in 1923 as an animation studio that later forayed into live-
action film production, television and theme parks. After a turn of successful ventures till the early
21st century, it began to experience a stage of stagnation and was looking at ways to reinvent itself.
• Pixar started off as in 1986 with a contribution from Steve jobs as an American computer animation
studio. In 1995 it produced its first film, Toy Story which marked the beginning of a successful foray
into animation movie making.
• The proposed merger kicked off by Walt Disney was a prime example of horizontal integration
working in the same industry. Apart from the usual benefits of the coming together of the finest
entities in the industry, it also worked as a means to ward off potential competition for Disney and
thus continue and potentially improve on its market share.
• In 2006, Disney acquired Pixar in a $7.4 billion deal. Disney merged its existing expertise in 2D
animation with the state of the art production value of Pixar and has since been able to consistently
deliver great works in the movie-making business. Pixar retained its core values and did not allow
Disney to change the winning culture that defined Pixar. The best of both organizations has thus come
together to have become one of the biggest production houses in the world.
 Vertical Integration: IKEA

• Ikea, a leading name in the wooden furniture game, is also one of the best examples of vertical
integration. The organization takes the last spot in the supply chain by acting as a retailer. It sells
its product directly to the end-users. However, in 2015, the organization took a major step that
is still considered one of the industry’s biggest steps.
• Ikea embraced vertical integration by purchasing a Romanian forest. The move was further
augmented by the purchase of forestland in Alabama in 2018. This helped Ikea achieve complete
control over the raw material and be less dependent on third parties, and also fulfil its aim to
create a sustainable supply chain.
• Ikea carried out  its moves through its subsidiary Swedwood (Industrial group within IKEA),
which was later renamed as the Ikea Industry in 2013. This gave the organization complete
ownership of the entire journey and made it a great among the many vertical integration
examples.
 Examples of Successful Growth Strategies

1. Facebook
• Facebook is omnipresent today, but when it launched in 2004, it was one of several social media networks. MySpace was the
dominant social media site at the time. So how did Facebook take over?
• The company used a market penetration growth strategy
• It started by focusing on a narrow target customer base, then expanded gradually. Here’s how Facebook did it.
Start small: Facebook began in the Harvard dorm room of Mark Zuckerberg. Consequently, the initial customer base was
Harvard students.
Expand gradually: Once Facebook gained traction at Harvard, it gradually expanded to other colleges. This allowed the
company to grow using the same success model employed at Harvard.
Increase growth when you’re ready: After Facebook spread to colleges, it opened up to non-students. Its measured
expansion allowed Facebook to focus on adjusting the product to the needs of each new customer segment. As a result, it
avoided the growth challenges that led to MySpace’s decline.
2. Amazon
• Amazon’s retail dominance began in 1995. Back then, consumers were not used to buying online. Despite that, Amazon grew
to billions of dollars in annual sales. What enabled Amazon’s growth?
• The answer is a diversification growth strategy
• Amazon was among the earliest online retailers, offering the ability to buy online (a new concept at the time) in a new
market: the internet. Here’s the growth strategy approach Amazon took.
• Offer an improved customer experience: It started by providing customers a larger selection of books than was available
in brick-and-mortar bookstores. Being online, Amazon did not have the limits of shelf space. Also, customers could check the
site and know right away if a book was in stock. This convenience allowed Amazon to succeed over larger brick-and-mortar
booksellers.
• Rinse and repeat: Amazon then used its proven model in books to expand into adjacent markets, such as DVD and
electronics sales. It continued to grow its offerings, and now it has spread into groceries and even healthcare.
3. Dollar Shave Club
• When Dollar Shave Club launched its razor business in 2012, Gillette had a commanding share of about 70% of the U.S. market
according to Entrepreneur magazine.
• In 2019, Gillette’s market share had eroded to about 53% according to a CNBC report. Meanwhile, Dollar Shave Club’s growth
prompted Unilever to buy it for $1 billion. How did Dollar Shave Club defy a much larger competitor?
• It employed a market development growth strategy
• The key to Dollar Shave Club’s success is that it could offer a lower-priced alternative to the leader by selling direct to the consumer,
which represented a new market for razors at the time.
Identify a new market: Gillette sold its products to retail outlets. Dollar Shave Club used the internet to employ a direct-to-consumer
model that allowed it to sell razors for as little as a dollar.
Offer an improved customer experience: Dollar Shave Club worked with manufacturers in Asia to produce razors, eliminating any
markup from a middle man. These cost savings could be passed on to consumers who flocked to its low-cost offering.
4. Google
• Google is renowned for its namesake search engine, but what fueled its growth into the company is its outsized revenue.
How did Google do it?
• It used a product development growth strategy
• Google started as a business-to-consumer (B2C) company offering a search engine. But it needed a source of revenue. To
achieve that revenue, it developed a new product, AdWords, targeted to businesses that had to pay to advertise.
Tailor the product for the customer: Going from a B2C to a business-to-business (B2B) product required a new set of
capabilities designed for its B2B audience.
The new product should complement existing products: Google made sure its new AdWords product fit seamlessly into
the experience of its B2C product. It had to safeguard the speed of its search engine, so it offered text ads, which loaded
quickly, and looked like the other search engine results. This guaranteed the consumer experience was not degraded by
advertising, ensuring that consumers would continue using the search engine.
 Mergers in India
S. No.  Name of the First Company Name of the Company Merged with Year in which it was Merged

1. Indus Towers Bharti Infratel 2020

2. Bank of Baroda Vijaya Bank and Dena Bank 2019

3. Vodafone India Idea Cellular 2018

4. Flipkart E-bay India 2017

 Acquisitions
 1. Amazon acquires Whole Foods (2017)
Amazon acquired whole foods for a total of $13.7 billion deal. It made the e-
commerce giant move into many physical stores.
It will make Amazon continue on its long goal of selling more groceries.
 Acquisitions
2. Sun Pharmaceuticals acquiring Ranbaxy
The beauty of this deal is that a smaller size company acquired a bigger size company.
This was a strategic acquisition for Sun Pharma as it would help them to fill gaps in the
US and also help them in getting better access to emerging markets and gain a strong
foothold in the domestic market. Sun Pharma also had the opportunity to gain the
number one position from the current third position in the dermatology space due to this
acquisition.
 Acquisitions
3. Microsoft and LinkedIn
Microsoft acquired LinkedIn for $196 per share to a $26 billion deal and
fought with its competitor Salesforce.com to do so. The shares of LinkedIn
rose 64% after the announcement was made.
 Acquisitions
4. Disney and 21st Century Fox
Disney acquired 21st-century fox for $71.3 billion. It was a real shakeup for
the entertainment business. This deal brought together two major giants of
the entertainment world
 Joint Venture
FORD + TOYOTA
Ford and Toyota began working together in 2011 to develop hybrid
trucks. Toyota brings the hybrid technology knowledge, while Ford brings its
leadership in the American truck market – the perfect example of a joint
venture created for access to expertise and intellectual property. 
 Joint Venture
Sony + Ericsson
Sony and Ericsson’s example is also a good example of a Joint Venture as they
joined hands to manufacture smart phones and gadgets. After several
operating years, Sony eventually acquired Ericson mobile manufacturing
division.
 Strategic Alliances
1. Barnes & Noble + Starbucks
Both companies win: Starbucks sells more coffee, and Barnes & Noble provides an
 excellent customer experience with its in-store cafes. 

2. Starbucks and Target

• One of the most well-known examples of a strategic alliance is the Starbucks and Target
partnership. In fact, you’ve probably seen this strategic alliance example several times. As
soon as you walk into Target, there’s a Starbucks counter waiting to blend your favorite
drink.
• Target and Starbucks know their brands share similar a audience – busy shoppers looking
for affordable “luxuries” and a quick escape from the everyday.
• This strategic alliance was formed all the way back in 1999, and is still going strong. We see
thousands of Target stores hosting Starbucks cafes to help fuel people’s Target runs. And
Target customers know if they get hungry or thirsty during a shopping trip, Starbucks has
them covered right in the store.
Strategic Alliance
3. Red Bull and GoPro

• In 2012, Red Bull partnered with GoPro to support a record-breaking skydive from a balloon.
Red Bull sponsored the dive, and the skydiver wore a GoPro camera to capture it.
• The two brands later formed a long-term strategic alliance for Red Bull extreme sports events,
such as the Red Bull Rampage. Only GoPro cameras are used to capture an athlete’s point-of-
view shots at these events.
• The Red Bull/GoPro strategic partnership is so successful because the brands have similar
adrenaline-seeking audiences. Thanks to this strategic alliance, both brands now have an even
stronger association with high-level thrills.
Turnaround Strategy

Dell Technologies stated in 2006 that the company would follow the cost-
cutting strategy by directly selling its products to the customers. The direct
sale didn’t work out, and the company faced a tremendous financial loss.
• Dell turnaround and pulled out from direct sale strategy in 2007. The brand
started selling computers through outlets and retailers. Nowadays, Dell is
the 2nd largest world’s retailers in the computer industry.
Divestment Strategy

TATA divested TOMCO and sold it to Hindustan Levers because it thought

detergents and soaps weren’t the company’s core business.