Week6 DQ2

p Vertical Integration

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Vertical integration is one way of management control wherein there are more branches of a certain organization who works with one owner to come up with different products or services satisfying one need

In vertical integration the control of a certain organization or business company goes from creating the inputs to materializing the output . It has become a big consideration in both management strategy and in marketing strategy especially if the company wants to establish its position

(Joskow 2006

There are two types of vertical integration : the backward integration and the forward integration (12manage 2009 . In the backward integration , the company is also the supplier or the manufacturer of the supplies they need . For example , the company owns the supplier of their spare parts or those who manufacture their inputs . In the forward integration , the company has the control over the distribution . They have the control over the retailers and all distributors of their products all over the place . A company may even do both by monopolizing the supplier and the distributor

It is a very big consideration because of the many advantages of adapting the management style . First is the ease of supply coordination . They can determine which of the supplies will be in scarcity so they could act on it . The company may be able to monopolize the supply . That means they can have sole access to resources . That also means higher competencies . Also , they can also cut the...