Benefits Of Vertical Integration

With reference to your own research and the item above, do you think that takeovers and mergers inevitably improve the performance of the businesses involved?

When searching for research to analyze and write about, I leaned more towards marketing and sales, which I want to ultimately work in. When I came across this article “Moving close to the customers: effects of vertical integration in the Swedish commercial printing industry”, I was interested in what vertical integration was and what it meant. I also was caught by the fact this was published using Swedish commercial printing. In this day and age, our country is becoming more and more globalized, and relies on other countries services and goods. I always find it interesting what other countries are doing in terms of business and maybe industries in America can learn from what they have implemented.

To what extent is growing through integration with other businesses a good way for a firm to increase its competitiveness?

An example of vertical integration here in Florida is the new medical marijuana industry. Florida lawmakers created one type of license that allows the owners to cultivate, process, and sell medical marijuana. With less than 10 licenses granted the industry will be easy to observe and control. The licenses owners also benefit because they have a larger control over the Florida market and can sell their products cheaper because they avoid transaction costs that occur from business to business interaction. Vertical integration is a management tactic that benefits policy makers and firms in this situation,

In a competitive market to which Johnson and Johnson operates, the smallest of errors can lead to consequences which can cut revenue. When large mistakes occur, millions of dollars are lost, and even worse, there is a loss of customer confidence. Johnson and Johnson has had numerous recalls in their consumer healthcare division recently, which rocked the organization’s once sound image, and diminished its profits. These recalls have hurt Johnson and Johnson’s stocks and cost the company about $900 million in sales last year (Rockoff, 2011).

However, it is not always the case that all firms should develop vertical integration strategy to enjoy economic of scale. Firm like boutique or niche items that produces on a small scale are not suitable to implement as it will benefit less from vertically integrated mainly because the input demand for grow is small and due to exclusive nature their prices are inelastic as compare to industry like Oil and Gas Industry, Telecom, Media, automobile developed vertical integration strategy .

Vertical integration – when you choose to produce raw materials and/or distribute finished goods themselves rather than rely on independent suppliers, factors and agents for these tasks

Macy’s has always found creative ways to attract consumers in the past such as the botanical garden. They should consider hosting more events to build up their brand and draw more positive attention to themselves. I thought it was a great idea for Macy’s to partner up with other retail companies to expand their inventory. Instead of take the initiative to horizontally integrate, they have decided to allow other retailers to setup in their department stores. This would bring in customers that are in a rush to pick up multiple things for holiday shopping to go to Macy’s as it would be a one stop shop. Best Buy is a good example of one of the many partnerships. They already have a fan based and loyal customers, so it would not make senses if they decided to start an electronic department to compete with the current market. It would also resolve the issue of low traffic in Macy’s as it would attract more shoppers to go to Macy’s to visit the section of different

Vertical integration is a concept in which a company develops or acquires production units for outputs which are

Nevertheless, the vertical value chain created by Aldi benefits the company’s corporate strategy. To be a local supplier,

In the Paramount decision of 1948 this was the outcome of the United States vs. Paramount Pictures. This was a monumental case in the right of production companies to own theatres and holding exclusive rights on which theatres could show there movies.it would also change the way Hollywood movies were made, distributed, and exhibited in theatres and other places. The court held that this distributing technique was in violation of the antitrust law that was put in place years before. This case is used in vertical integration cases and is later known as the first nail in the coffin of the old Hollywood studio system.

Back in 2002, Sony geared themselves toward a vertical strategy as reported by Rob Weisenthal, VP and CFO of Sony Corp. of America, “Under the USA umbrella, we undertook a number of vertical initiatives for each operating division. These have already produced significant operational streamlining and financial performance improvements.” As discussed in his release, Weisenthal talked about Sony Pictures Entertainment and their strategy to restructure television operations, where core programming competencies were focused on. Film and television digitalization efforts have been expanded and have engineered a significant reduction in their corporate overhead. In addition, he mentionted that Sony Music has made long

activities. The industry is already vertically integrated to some extent. They also deal with similar suppliers

1. The textile/clothing sector is vertically de‐integrated: design, textile manufacture, clothing manufacture, distribution are undertaken by specialist firms. Why? In this case, clothing firms like American Apparel have vertically integrated, in order to get time to market, increase resources availability, and cost efficiency. However, many textile/clothing sector is vertically de‐integrated which means that their design, textile manufacture, clothing manufacture, distribution are undertaken by specialist firms. (De-verticalization) is the process of separating functions and services from a once-integrated business model. Companies such as Levi Strauss & Co., who emphasize the