Question

​Topform Company Limited produces powered milk and operates in the Eastern Region of Ghana. The company has real growth potential and the management wish to concentrate its growth efforts within the industry. Explain how the company can grow vertically backwards and forwards as well as horizontally within the industry.

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Answer 1

This assessment will explain how the Topform company limited can grow vertically backward and forward and horizontally within the industry.

Vertically backward integration:

The company can go for vertically backward integration by integrating with the suppliers of raw materials for the company.

Raw materials for a company producing powdered milk can be either the milk or the cow itself. Moreover, they would also require the food for feeding cows and other requirements such as shelter.

Thus, they can backward integrate vertically and grow through expansion via integrating with the supplier of raw material they require.

Forward integration:

The Topform company limited can do forward integration by integrating and collaborating with the Product's marketer.

If they want to expand, the company can go for expanding its conduct of business via undertaking the marketing activities of the company in its own hands.

Horizontal growth within the industry:

The Topform limited company can undertake the expansion horizontally within the industry by merging with a company at the same level in the production supply chain, performing similar functions as the company.

There are various companies in Ghana with which the Topform company limited can integrate. For example, Bhavani limited, Dano milk company can be some suitable companies with which the Topform company limited can integrate for expansion horizontally.