Horizontal and Vertical Integration of Organizational IT Systems
Total Page:16
File Type:pdf, Size:1020Kb
Load more
Recommended publications
-
Make and Buy: Outsourcing, Vertical Integration, and Cost Reduction∗
Make and Buy: Outsourcing, Vertical Integration, and Cost Reduction∗ Simon Loertscher† Michael H. Riordan‡ University of Melbourne Columbia University November 16, 2017 Abstract Globalization reshaped supply chains and the boundaries of firms in favor of outsourcing. Now, even vertically integrated firms procure substantially from ex- ternal suppliers. To study procurement and the structure of firms in this reshaped economy, we analyze a model in which integration grants a downstream customer the option to source internally. Integration is advantageous because it allows the customer sometimes to avoid paying markups, but disadvantageous because it dis- courages investments in cost reduction by independent suppliers. The investment- discouragement effect more likely outweighs the markup-avoidance effect if the upstream market is more competitive, as is so in a more global economy. Keywords: outsourcing, vertical integration, make and buy. JEL-Classification: C72, L13, L22, L24 ∗We are grateful to the editor (John Asker) and three anonymous referees for comments and sugges- tions that have improved the paper considerably. The paper has also benefitted from comments by Malin Arve, Patrick Bolton, Roberto Burguet, Jacques Cr´emer, Jean de Bettignies, Yassine Lefouili, Hans- Theo Normann, Eric Rasmusen, Patrick Rey, Antonio Rosato, Yossi Spiegel and workshop participants at the 2011 Industrial Economics Conference at Zhejiang University, at the 2013 Kick-off Workshop of the D¨usseldorf Institute for Competition Economics, at Ecole Polyt´echnique in Paris, at Indiana Uni- versity, at the Organizational Economics Workshop at the University of Sydney 2012, the Workshop of Public Private Collaboration 2013 at IESE Business School in Barcelona, the 2013 Canadian Economics Association Meetings in Montreal, the 2014 Australasian Economic Theory Workshop in Canberra, the 2014 Searle Conference on Antitrust Economics in Chicago, and the Conference in honour of Jacques Cr´emer on Advances in the Economics of Organizations and the New Economy in Toulouse in 2016. -
Implementation of SWOT Analysis in Determining Competitive Strategy on Catering and Conference Services in Hotels
Implementation of SWOT Analysis in Determining Competitive Strategy On Catering and Conference Services in Hotels Ari Tihar Marpaung 1,Aditya Pratomo 2, and Aries Wicaksono 3 {[email protected] 3} 1Accounting Department, Faculty of Economic & Communication, Bina Nusantara University, Jakarta, Indonesia 2Hotel Management Department, Faculty of Economic & Communication, Bina Nusantara University, Jakarta, Indonesia 3Accounting Department, BINUS Online Learning, Bina Nusantara University, Jakarta, Indonesia Abstract: The objectives of this research are To find out the internal conditions related to Strengths and Weaknesses and to find out the external conditions related to Opportunities and Threats to Catering and Conference Services, The Ritz-Carlton Jakarta, Pacific Place and to determine the competitive strategy of the SWOT analysis at the Catering and Conference Services, The Ritz-Carlton Jakarta, Pacific Place. The type of this research is descriptive research, while the time horizon that is applied is Cross Sectional Data. Data collection techniques used in this study are observations and interviews. Samples from this study were 18 respondents using purposive sampling. Based on the results of the research Implementation of SWOT Analysis in Determining Competitive Strategies, where divisions that enter cells I, II, and IV can be described as grow and build. Intensive strategies (market penetration, market development, and product development) or integrative strategies (backward integration, forward integration, and horizontal integration) can be the most suitable strategy for divisions within this cell. Keywords: Strategy, SWOT Analysis, Competitive Strategy 1. Introduction The world of tourism is currently growing rapidly and increasing in various parts of the world, one of which is tourism in Indonesia. -
The U.S. Industrial Revolution Early 20Th Century
The U.S. Industrial Revolution Early 20th century Mr. Raffel 20th Century American History Consider the Humble Apple iPod • So sophisticated • So convenient • Mine has 5,000+ songs How did that iPod make it into your backpack? • In writing, please explain all the steps an iPod would travel until someone buys it. Modern Capitalism Depends On: Production: Distribution: Consumption: Raw Materials Machines Advanced Adequate Technology markets Skilled Workers Transportation Factories (Railroads) Role of Energy Advertising Electricity Govt. role? Marketing Corp. Structure Access to Capital The Industrial Revolution • Event in U.S. history, starting in the late 19th century- continuing today • Definition: Shift in manufacturing from hand to machine production • Movement of people and workers from rural farms to urban factories • Production occurs in factories, not homes • Transformed the way we live I.R. Origins in U.S. • Started in late 18th century England, but rapid expansion of industry did not happen here until during/after Civil War. • Demands of Civil War--need to cloth, arm and supply soldiers led to growth of industry • Republican (party) willing to use govt to promote economic growth • Business boom due to war profits and new generation of business leaders Factors Behind the U.S. Industrial Revolution • Abundance of land and natural resources • Excellent natural and man-made transportation • New ways to organize work and companies • Invention/Innovation-creation of new technologies • Increased supply of labor (workers) About the Factors… • Each factor of production had advantages and disadvantages for society • Government policy promoted the development of several of these factors • Factors are often related to each other • We will look at some of these factors in more detail…. -
Does Horizontally Integrated Firms Enjoy Competitive Advantage in the Value-Chain? Evidence from the Nigerianfinancialsector
International Journal of Advancements in Research & Technology, Volume 7, Issue 7, July-2018 ISSN 2278-7763 143 DOES HORIZONTALLY INTEGRATED FIRMS ENJOY COMPETITIVE ADVANTAGE IN THE VALUE-CHAIN? EVIDENCE FROM THE NIGERIAN FINANCIAL SECTOR Bamidele S. Adeleke1, Vincent A. Onodugo2 & Oluwaseun J. Akanji3, 1,3 Department of Marketing, Ladoke Akintola University of Technology Ogbomoso. 2Department of Management, University of Nigeria, Enugu Campus ABSTRACT The financial sector of Nigeria has become more heightened and this has lead many financial institutions rival firms pursing complementary alliances and strategic mergers. This study investigated the competitive advantage of utilizing horizontal integration strategies in the Nigeria financial industry. By adopting cross-sectional survey, data was collected through a self-administered structured questionnaire. The target population of the study comprised of 2553 management staff of 12 selected financial institutions in South-West, Nigeria. Sample size of 753 was derived. The hypotheses were tested at 0.05 level of significance. The findings revealed that competitive absorption have a positive effect (enhanced) on the market coverage of financial institutions in Nigeria. Strategic alliances impacted positively on the economies of scale of Nigeria’s financial institutions.. The results informed the study conclusion which shows that merger, acquisition and strategic alliance among financial companies were the major integration strategiesIJOART utilized by financial firms in Nigeria. It was recommended -
Vertical Integration and the Sherman Act: the Legal History of an Economic Misconception
VERTICAL INTEGRATION AND THE SHERMAN ACT: THE LEGAL HISTORY OF AN ECONOMIC MISCONCEPTION ROBERT Boxt STHOUGHTHE LAW OF VERTICAL INTEGRATION' has been developing ,yunder the Sherman Act for better than forty years, opinions as to what that law is, and what it has been, are still confused. In part, this confusion reflects the state of the law; in part, it springs from a misreading of the cases. This paper represents an attempt to reorder this area of the antitrust law; it is an attempt to discern a consistent doctrine concerning vertical integration running through the cases, and to evaluate the worth of that doctrine in terms of the purposes of the Sherman Act. The current predominant view of the case law appears to be that prior to 1940 vertical integration had not been attacked as such, and that the Sherman Act does not, and did not, condemn such integration except when it is used to extend monopoly from one level of production to an- other.2 This paper reaches completely contrary conclusions. First, the recent attacks upon vertical integration are not something new in the law. Rather they are merely a spectacular bringing to fruition of a way of thinking, an attitude, that goes back to the earliest cases. Second, the Sherman Act, "new" or "old," has not condemned vertical integration only where there was monopoly at one level of operation (horizontal monopoly). Where the courts have thought abusive practices traceable to t Research Associate, Antitrust Project, University of Chicago Law School. 1 Vertical integration exists when a firm "transmits from one of its departments to another a good or service which could, without major adaptation, be sold in the market." Adelman, Integration and Antitrust Policy, 63 Harv. -
Impact of Vertical Integration
Munich Personal RePEc Archive Impact of Vertical Integration H. Luke, Erin The University of Wisconsin-Whitewater 7 March 2021 Online at https://mpra.ub.uni-muenchen.de/106490/ MPRA Paper No. 106490, posted 08 Mar 2021 07:37 UTC 1 Impact of Vertical Integration Erin H. Luke The University of Wisconsin-Whitewater 2021 Abstract Vertical integration is a powerful, and complex business strategy that when used under the right conditions can positively impact an organization. A company’s strategists need to understand what dimensions of integration to use, and the best time to use it. De Beers is a company with a controversial history of being an anti-competitive monopoly. By strategizing into a vertical integrated company De beers has added value to its company by not only targeting the retail, and industrial market, but also the I.T. industry. Forward and backward integration has helped organizations like De Beers maintain control over its inputs and outputs. Rather than just buying all diamond mines, and stock piling the material in order to control the prices, De Beers has embraced change by focusing on new emerging industries. Through vertical strategy and new ownership De Beers is turning its company around in a very competitive luxury industry. Organizations should be aware of the costs of vertical integration when exploring its potential. Bureaucratic costs, and companies becoming too large and inflexible under certain environments can become a problem. Vertical integration is a powerful strategy, but it must always be under scrutiny, and redesigned when the external and internal environment deems change necessary. 2 2 Table of Contents What is Vertical Integration? .......................................................................................................3 De Beers Summary ........................................................................................................................ -
Vertical Integration and Market Structure by Timothy F
This work is distributed as a Discussion Paper by the STANFORD INSTITUTE FOR ECONOMIC POLICY RESEARCH SIEPR Discussion Paper No. 11-010 Vertical Integration and Market Structure by Timothy F. Bresnahan Jonathan D. Levin Stanford Institute for Economic Policy Research Stanford University Stanford, CA 94305 (650) 725-1874 The Stanford Institute for Economic Policy Research at Stanford University supports research bearing on economic and public policy issues. The SIEPR Discussion Paper Series reports on research and policy analysis conducted by researchers affiliated with the Institute. Working papers in this series reflect the views of the authors and not necessarily those of the Stanford Institute for Economic Policy Research or Stanford University. Vertical Integration and Market Structure Timothy Bresnahan and Jonathan Levin* Stanford University March 2012 Abstract. Contractual theories of vertical integration derive firm boundaries as an efficient response to market transaction costs. These theories predict a relationship between underlying features of transactions and observed integration decisions. There has been some progress in testing these predictions, but less progress in quantifying their importance. One difficulty is that empirical applications often must consider firm structure together with industry structure. Research in industrial organization frequently has adopted this perspective, emphasizing how scale and scope economies, and strategic considerations, influence patterns of industry integration. But this research has paid less attention to contractual or organizational details, so that these two major lines of research on vertical integration have proceeded in parallel with only rare intersection. We discuss the value of combining different viewpoints from organizational economics and industrial organization. JEL classification numbers: D23, L14, L22. -
Vertical Integration in High-Transaction Cost Sectors: the Case of the Bulgarian Pharmaceutical Industry
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Todorova, Tamara Article — Manuscript Version (Preprint) Vertical Integration in High-Transaction Cost Sectors: The Case of the Bulgarian Pharmaceutical Industry Journal of Advanced Research in Management Suggested Citation: Todorova, Tamara (2010) : Vertical Integration in High-Transaction Cost Sectors: The Case of the Bulgarian Pharmaceutical Industry, Journal of Advanced Research in Management, ISSN 2068-7532, ASERS Publishing, Craiova, Vol. 1, Iss. 2 (Winter), pp. 127-138 This Version is available at: http://hdl.handle.net/10419/172498 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen -
Vertical Integration in the Luxury Sector
Vertical Integration in the their economic model– and the consequen - ces it has had on the way the luxury sector Luxury Sector: Objectives, functions. A company is considered to be vertically Methods, Effects integrated when it is present at a number of Franck Delpal successive stages of the production process. However, a number of studies have outlined the various methods of integration, that go well beyond the simple full ownership of two successive production phases. Harrigan thus defines the different degrees of integra - tion implemented by companies, from complete control to total dis-integration via intermediary levels that concern only a selection of the production process or forms of control that are alternative to ownership (quasi-integration, vertical restrictions…). This analytical table corresponds more to The luxury market has grown impressively the diversity of the practices observed. over the past three decades. The figures Schematically, in the case of luxury fashion, supplied by Bain & Company testify to this we can outline four distinct phases in the fact: sales of luxury products went from 72 making of a product: billion Euros in 1994 to 168 billion Euros in 2010, which makes an annual growth rate – Design; average of 5%. Fashion items (ready-to- – The production of intermediary goods wear, shoes, leather goods) still retain a (fabrics, leathers…); considerable market share as they represent – Manufacturing the finished product; half of this figure. In addition to its econo - – Distribution, wholesale then retail. mic weight, the luxury fashion sector merits We are aware that this level of simplification analysis due to the evolution in its structure forces us to set aside numerous essential (number, size and organisation of compa - divisions in a company (quality control, nies) over the past few years. -
The Effects of Vertical Integration on Competing Input Suppliers
The Effects of Vertical Integration on Competing Input Suppliers by R. Preston McAfee* Department of Economics University of Texas Austin, TX 78712 Wednesday, March 03, 1999 Prepared for The Federal Reserve Bank of Cleveland Abstract: When a downstream firm buys an input supplier, the downstream firm can reduce its costs of using that input. Other input suppliers typically respond by pricing more aggressively, given the demand reduction, which tends to lower input supply costs to other firms. Thus a vertical merger may lower rival's costs, rather than raise them. * I have benefited from the comments of Joe Haubrich and William Thompson. Vertical integration is a booming phenomenon in many US industries. The massive consolidation of the defense industry has resulted in three or four platform developers1 that produce many of the components used in military platforms. Banking is consolidating at a rapid pace, with integration of related financial services (insurance, credit cards) along with input services (check clearing, payments, electronic funds transfer) into the parent companies. Telecommunications firms are merging, combining cable, wireless, local wireline and long distance services. Simultaneously, other firms are concentrating on their "core competency" and selling off related lines of business. Automobile manufacturers, for instance, are increasing their dependence on independent or semi-independent parts suppliers. What are the effects of vertical integration? There is a large literature that might reasonably be described as disjointed. Much of the focus has been on providing a rationale for opposing vertical mergers on antitrust grounds. When a firm F buys an input supplier (upstream firm) U that also supplies F's (downstream) competitor, the firm can raise the price of the input to its downstream competitor, thereby providing an advantage in the downstream market. -
43 Chapter Four
Chapter Four - Issues around Media concentration in South Africa 4.1 The South African Media – An overview In this chapter, the study will focus on findings about the South African media, and how it fares in the global context. Globalisation has had far reaching results and its effects have been felt in South Africa, Capitalism’s “free market” organisation of the media has resulted at centralised and concentrated media conglomerates with narrower and narrower interests. As media capital becomes concentrated, so does the interest that shape media content. As the media industries have become more profitable, non-media firms have started to buy up media properties (Williams, 2003: 80). Williams notes that cross-media ownership has developed at a rapid pace in recent years. This chapter will give an insight into issues of ownership and concentration in the South African media, and examine the barriers that could have been encountered by ThisDay newspaper. It will also discuss issues around the advertising industry in South Africa including an examination of the role of media planners and their methods of evaluating the media to understand how this affects the advertising placed in the press. However, to better understand the South African media today, a brief insight into its historical context will be illuminating. 4.1.1 The history of the South African Press The history of the South African press can be traced to the first newspaper published in the Cape in August 16th, 1800. Pedro Diederichs noted that this small bilingual newspaper, The Cape Town Gazette and African Advertiser / Kaapsche Stads Courant en Afrikaansche Berigter has spawned an industry which has grown to become the largest in Africa with 5000+ registered publications33. -
Markets for Technology, Vertical Integration, and Industry Dynamics: Efficiency and Foreclosure in the Laser Printer Industry John M
Paper to be presented at the 35th DRUID Celebration Conference 2013, Barcelona, Spain, June 17-19 Markets for Technology, Vertical Integration, and Industry Dynamics: Efficiency and Foreclosure in the Laser Printer Industry John M. de Figueiredo Duke University School of Law [email protected] Brian S. Silverman University of Toronto Rotman School of Management [email protected] Abstract An important unanswered question in strategy research is: how does vertical integration affect industry evolution? Foreclosure and efficiency theory both predict that vertical integration by one firm can increase the exit rate of non-integrated rivals, but offer competing predictions for the cause of this increase. A related question is how upstream markets for technology affect downstream firm and industry performance ? i.e., to what extent does a thick upstream market for key technological inputs reduce foreclosure and reduce the efficiency benefits of integration? This paper attempts to answer these questions by a developing a series of predictions regarding the effect of vertical integration patterns and upstream markets for technology on downstream pricing, entry rates, and exit rates. We test these predictions empirically with unusually detailed data on the U.S. laser printer and laser engine industries between 1984 and 1996. We exploit both cross-section and time-series variation in governance of laser engine procurement among laser printer firms to explore the effects of vertical integration on entry, exit, and pricing dynamics in each segment of the industry. Jelcodes:L10,L63 Markets for Technology, Vertical Integration, and Industry Dynamics: Efficiency and Foreclosure in the Laser Printer Industry Abstract An important unanswered question in strategy research is: how does vertical integration affects industry evolution? Foreclosure and efficiency theory both predict that vertical integration by one firm can increase the exit rate of non-integrated rivals, but offer competing predictions for the cause of this increase.