Strategic integration is a combination some components or functions of different units of business into a single combined and centralized unit to extract more benefits. Strategic integration is a very important process to improve the performance of the organization as it helps in aligning the business strategies continuously in a rapidly changing business environment. Firms use strategic integration as an approach to achieve business goals of transitions and also to unpredictable challenges which are very likely to occur in a business environment.
Strategic integration aims at achieving the effective results through combined effort of different organizational groups and processes. For the strategic integration to happen, organization should study the industry trends, external environment and resource capabilities and have a clear understanding of its strengths and core competencies. Effective strategic integration includes integration of both internal and external processes of a organization.
Internal Integration: Internal integration is a strategic approach through which we achieve synergy by grouping up internal processes like advertising, accounting, supply chain, sales, purchases, trainings etc. All the staff should be actively involved, the organization's strategy should be clearly understood, their roles and responsibilities should be clearly defined to achieve successful internal integration. Organizations should use modern technologies and IT to integrate internal systems and smoothen the communications across all the levels.
External Integration: External integration is a strategic approach through which we achieve synergy by grouping up functional processes which affect external stakeholders like suppliers, distributers, debtors, creditors, agents, customers etc. Organization should implement effective communication and networking systems and ensure that there is appropriate link between internal and external stakeholders.
Strategic integration involves high investments in the initial stages, but it is a tactical approach to handle unpredictable challenges, has long term advantages and reduce the costs in a longer run.