File Name: vertical integration and corporate strategy .zip
In microeconomics , management , and international political economy , vertical integration refers to an arrangement in which the supply chain of a company is integrated and owned by that company.
Vertical integration and horizontal integration
Skip to search form Skip to main content You are currently offline. Some features of the site may not work correctly. DOI: Proposing a new look at vertical integration and the dimensions that comprise it, this study develops a framework for predicting when firms use make-or-buy decisions. The strategic business units SBUs studied made fewer products and services in-house and firms were engaged in fewer stages of processing when demand was highly uncertain than they did when demand was more certain. View PDF. Save to Library.
Skip to search form Skip to main content You are currently offline. Some features of the site may not work correctly. Diversification strategy to create sustainable competitive advantage depends on the rarity and on the cost of imitability of a particular strategy chosen by a firm. Backward and forward vertical integration may be pursued by industry firms competing to achieve competitive advantage property and to increase the chance to be able to appropriate economic rents or to guarantee rare, difficult to imitate and costly resources. Save to Library. Create Alert.
Businesses are always looking for methods to reduce costs and control the quality of the products and services they provide. A company is able to create a competitive advantage by integrating different stages of its production process and supply chain into their business. This is called vertical integration. Depending on the source of information, there are generally six accepted stages of a supply chain. The stages relative to vertical integration are materials, suppliers, manufacturing, and distribution.
Growth platforms are specifically named initiatives selected by a business organization to fuel revenue and earnings growth. Distinguish between the varying integrations and diversifications that allow businesses to pursue strategic growth. Growth platforms may be strategic or tactical. Strategic growth platforms are longer-term initiatives for high-scale revenue increases. Generic examples of commonly selected strategic growth platforms include pursuit of specific and new product areas, entry into new distribution channels, vertical or horizontal integration, and new product development.
In this paper I test the theory that internal capital markets are a motivation for both corporate diversification and vertical integration. I use a sample of firms from 39 countries. Using this data I also test theories about vertical integration and capital market development. I also test agency cost and taxation theories of diversification and vertical integration. I find a significant and negative relationship between corporate diversification and capital market development. I find a significant and positive relationship between vertical integration and capital market development. This is a preview of subscription content, access via your institution.
Note on Corporate Strategy
The degree to which a firm owns its upstream suppliers and its downstream buyers is referred to as vertical integration. Because it can have a significant impact on a business unit's position in its industry with respect to cost, differentiation, and other strategic issues, the vertical scope of the firm is an important consideration in corporate strategy. Expansion of activities downstream is referred to as forward integration , and expansion upstream is referred to as backward integration. The concept of vertical integration can be visualized using the value chain. Consider a firm whose products are made via an assembly process.
Proposing a new look at vertical integration and the dimensions that comprise it, this study develops a framework for predicting when firms use make-or-buy decisions. The strategic business units SBUs studied made fewer products and services in-house and firms were engaged in fewer stages of processing when demand was highly uncertain than they did when demand was more certain. Internal transfers from upstream or to downstream business units were more numerous when synergies with adjacent SBUs were substantial than when they were not.
In this paper I test the theory that internal capital markets are a motivation for both corporate diversification and vertical integration. I use a sample of firms from 39 countries.
Horizontal Integration in Strategic Management
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- Con permiso. Не дождавшись ответа, он вошел. Типичная для Испании туалетная комната: квадратная форма, белый кафель, с потолка свисает единственная лампочка.
Он отступил от двери и отошел чуть в сторону, пропуская Чатрукьяна в святая святых Третьего узла. Тот в нерешительности застыл в дверях, как хорошо обученная служебная собака, знающая, что ей запрещено переступать порог. По изумлению на лице Чатрукьяна было видно, что он никогда прежде не бывал в этой комнате. Какова бы ни была причина его волнения, когда он колотил в стеклянную стену Третьего узла, она моментально улетучилась. Он разглядывал роскошную внутреннюю отделку, выстроившиеся в ряд компьютеры, диваны, книжные полки, залитые мягким светом.
Все еще темно? - спросила Мидж. Но Бринкерхофф не ответил, лишившись дара речи. То, что он увидел, невозможно было себе представить.