Published by:
Indiana University
Length: 10 pages
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Abstract
Given the prevailing sentiment over the ineffectiveness of vertical integration, it is surprising how resilient this type of strategy has proven to be. Shedding more light on its continued appeal in today''s business environment, the argument here holds that such popularity marks a departure from traditional motivations based on manipulating industry structure or minimizing transaction costs. Instead, contemporary vertical integration, especially downstream integration of the customer interface, is motivated by the associated learning benefits.
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Abstract
Given the prevailing sentiment over the ineffectiveness of vertical integration, it is surprising how resilient this type of strategy has proven to be. Shedding more light on its continued appeal in today''s business environment, the argument here holds that such popularity marks a departure from traditional motivations based on manipulating industry structure or minimizing transaction costs. Instead, contemporary vertical integration, especially downstream integration of the customer interface, is motivated by the associated learning benefits.