Among such holdings, one can single out OOO UGMK Holding. This association is in first place in many market segments far beyond the Urals and Sverdlovsk region. The holding includes:
non-ferrous metallurgy enterprises;
enterprises of the extractive industry;
ferrous metallurgy enterprises;
enterprises for enrichment canada mobile number of raw materials for metallurgical production;
mechanical engineering enterprises;
aircraft manufacturing enterprises;
scientific organizations;
construction companies engaged in civil and industrial construction;
construction industry enterprises;
enterprises producing cable products;
service sector enterprises;
food industry enterprises.
For some groups of enterprises belonging to UGMK Holding LLC, vertical integration by industry affiliation is used, ensuring a significant reduction in production costs and increased management efficiency.
By conducting work in many areas, the holding acquires resistance to falling demand in individual markets, and by increasing the concentration of resources, it gains the ability to finance areas that are a priority for its effective functioning.
Partial vertical integration
In this case, the holding unites a group of enterprises that, taken together, do not provide a closed production cycle, but at the same time there are partial coincidences with the production chain for the release of finished products by the holding.
Partial vertical integration of a holding is typical for the initial stages of its development and is determined by the desire of the management to include in the holding companies that have sufficient production capacity to form a closed production cycle. Implementation of full vertical integration within a holding is not always justified, since the production of final products requires a lot of material resources.
Partial vertical integration
Source: shutterstock.com
Partial vertical integration is used, for example, by construction holdings. In this area, it is almost impossible to develop a closed production cycle that includes stages from the production of all building materials to the construction of facilities. This is due to the large amount of total costs for organizing continuous production activities.
To produce construction materials, expensive professional equipment is often required. It is necessary not only to prepare the site, but also to establish effective management of the mechanisms. Thus, the formation of a holding company capable of ensuring the release of all the materials and devices required in construction, in fact, turns out to be impossible.
At the same time, it is worth considering that during the procurement process, the construction company shares a significant portion of its profits with suppliers. Also, an increase in prices for the suppliers' products is inevitable, and they can be set arbitrarily. The cost of materials increases by the amount of the supplier's overhead costs, which are reimbursed by the customer company.
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Forms of company integration
Of course, it is not customary to say about a new product that it was produced by "the integration of Google and Ford". In fact, integration can take various forms, based on the goals and direction of joint work, the degree of coordination. Let's consider these forms:
Strategic Alliance
In this case, two or more companies agree to carry out joint activities for a certain period of time. By forming alliances, mutual benefits are derived from the transfer of resources, technology and experience.
In 2021, Google and Ford partnered to equip Ford vehicles with Google's Android-based system, giving Google continued large orders and Ford a full-fledged digital product.
In a strategic alliance, companies never merge or acquire each other.