Vertical integration (VI) – Corporate Strategy
{"Image DocumentName": "Vertical integration (VI) \u2013 Corporate Strategy", "Image ImageDescription": "Vertical integration expands into businesses that supply to the business or are distributors. Benefits of VI: Securing supply & distribution chains \uf0e8 cost savings \uf0e8 efficiency. Limitations of VI: Less competition \uf0e8 less productive \uf0e8 inefficiency [Soviet Economic Model] Hypothetical Examples: Starbucks in VI. GM in VI. Managers may also pursue diversification opportunities to create value through a strategy of vertical integration. Vertical integration means the company expands into businesses that either produce the supplies needed to make products or that distribute and sell those products to customers. Hypothetical Examples: Suppose Starbucks owns a whole supply chain: coffee farm in Africa\uf0e8 coffee trading in Africa \uf0e8 coffee vendor in US \uf0e8 coffee factory in US \uf0e8 coffee distributor \uf0e8 coffee retail. Suppose GM owns a whole supply chain: raw materials \uf0e8 parts manufacturing \uf0e8 parts vendors \uf0e8 GM Assembly Factory \uf0e8 distributor \uf0e8 dealership.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}