Matching vertical integration strategies to competitive conditions

Matching vertical integration strategies to competitive conditions This paper contrasts the vertical integration strategies of 192 firms in the presence of diverse environmental and strategic forces to suggest how successful uses of vertical integration differ from less successful ones. Briefly, firms which did not use vertical integration as effectively transferred more goods and services internally, and they did so more often under adverse industry conditions. A frequent error was to undertake more integrated activities in‐house and engage in longer chains of processing from ultra‐raw materials to finished goods. Ironically, many of the vertically integrated firms that suffered adversity possessed the bargaining power needed to contract advantageously for goods or services, but accepted an overly risky ownership position unnecessarily by producing them, instead. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

Matching vertical integration strategies to competitive conditions

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Publisher
Wiley
Copyright
Copyright © 1986 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
DOI
10.1002/smj.4250070605
Publisher site
See Article on Publisher Site

Abstract

This paper contrasts the vertical integration strategies of 192 firms in the presence of diverse environmental and strategic forces to suggest how successful uses of vertical integration differ from less successful ones. Briefly, firms which did not use vertical integration as effectively transferred more goods and services internally, and they did so more often under adverse industry conditions. A frequent error was to undertake more integrated activities in‐house and engage in longer chains of processing from ultra‐raw materials to finished goods. Ironically, many of the vertically integrated firms that suffered adversity possessed the bargaining power needed to contract advantageously for goods or services, but accepted an overly risky ownership position unnecessarily by producing them, instead.

Journal

Strategic Management JournalWiley

Published: Nov 1, 1986

References

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