Search results
Results from the WOW.Com Content Network
Vertical integration can be desirable because it secures supplies needed by the firm to produce its product and the market needed to sell the product, but it can become undesirable when a firm's actions become anti-competitive and impede free competition in an open marketplace. Vertical integration is one method of avoiding the hold-up problem.
Horizontal integration is the process of a company increasing production of goods or services at the same level of the value chain, in the same industry. A company may do this via internal expansion or through mergers and acquisitions .
Vertical collaboration is the collaboration when two or more organizations from different levels or stages in supply chain share their responsibilities, resources, and performance information to serve relatively similar end customers; while horizontal collaboration is an inter-organizational systemrelationship between two or more companies at ...
Horizontal integration, when a company increases production of goods or services at the same level of the value chain and in the same industry (e.g via internal expansion, acquisition or merger) Vertical integration, when the supply chain of a company is integrated and owned by that company (i.e. integration of multiple stages of production)
Vertical integration shifts the ownership of the organizational asset of the firm and therewith creates more flexibility and avoids potential of a hold-up. In that way, the (transaction) costs associated with contractually induced hold-ups are saved and also the costs associated with the number of contracts written and executed.
These integration mechanisms are defined as meta-integration, vertical integration, and horizontal integration. Meta-integration is based on the management and business philosophy which defines the company's consideration of and relation to its stakeholders’ values.
The only portion of the 1984 guidelines that remains in effect is Section Four, which governs the examination of market effects of vertical integration. These guidelines were replaced by the 1992 Merger Guidelines, [ 7 ] which fine-tuned previously established tools and policies, such as the SSNIP test and rules governing the acquisition of ...
Gasoline production provides another example of supply restraints and competitive dominance by means of vertical integration. Market foreclosure plays a consistent role in the dynamics of the gasoline industry and more specifically with large refineries with significant capabilities of production. Researchers have estimated that US wholesale ...