Homework Case Study Example | Topics and Well Written Essays - 750 words - 1

Homework - Case Study Example An example of backward vertical integration is when a company producing sugar buys the can farm from which they have been acquiring their primary raw product. In the short term it will solve supply problems since it can guarantee itself a constant supply of sugarcane; should there be a cane shortage, the sugar producer is protected from having to compete with others for the limited cane. On the other hand, it takes control of the cane producing process and safeguards against substandard or poor quality products. Backward integration is a particularly beneficial strategy under the following circumstances; when the supplies serving the firm are not reliable. On the other hand, when the suppliers in the industry are few but there are many buyers, and it’s an industry that keeps rapidly expanding and is characterized with unstable prices of inputs. However, before committing to this line of business the buyer firm must ensure it has sufficient capabilities and resources to manage the new business. The oil industry presents several examples of vertical integration with firms such as BP, while it retrospectively used to outsource for exploration and focus on production, it gradually evolved its production functions and today it handles both functions and this has resulted in considerable success and profitability. Social corporate responsibility is the factor that marks the line between a caring and responsible corporate and a predatory and exploitative one (Porter & Kramer, 2006). While admitting that the primary objective of any business is to make profit, this should not be achieved at the expense of the lives and livelihoods of communities and staff members. If this were the case, then business ethics would be redundant, in the above case study, the firms is faced with a serious dilemma, on one hand there is a predator intent on capitalizing on the firms weakness which in part stem from its tendency to