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Article
Publication date: 1 January 1983

Kathryn Rudie Harrigan

Vertical integration is often one of the first diversification strategies that firms consider. To choose the right strategy, companies must assess the four different types…

Abstract

Vertical integration is often one of the first diversification strategies that firms consider. To choose the right strategy, companies must assess the four different types of possible integration and weigh the merits of each.

Details

Journal of Business Strategy, vol. 3 no. 3
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 1 August 1996

Jill E. Hobbs

Observes that supply chain management is a rapidly‐evolving subject which offers many insights into how industries are organized and into the efficiency gains which can be…

Abstract

Observes that supply chain management is a rapidly‐evolving subject which offers many insights into how industries are organized and into the efficiency gains which can be made under different organizational structures, pointing out that it is an interdisciplinary concept, drawing on aspects of marketing, economics, logistics, organizational behaviour, etc. Presents a framework from the economics literature which may be useful for those interested in understanding and exploring the concept of supply chain management. Describes the origins and development of transaction cost analysis and explains the key concepts of the framework. Discusses the potential effects of transaction costs on vertical co‐ordination within an industry and, hence, on supply chain management. Finally, suggests methods for empiricizing transaction cost analysis, resulting in recommendations for closer co‐operation between researchers and business managers.

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Supply Chain Management: An International Journal, vol. 1 no. 2
Type: Research Article
ISSN: 1359-8546

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Article
Publication date: 24 August 2010

Niels Peter Mols

“Concurrent sourcing” is a term used by Parmigiani to describe the phenomenon where a firm simultaneously buys and makes the same good or service. The purpose of this…

Abstract

Purpose

“Concurrent sourcing” is a term used by Parmigiani to describe the phenomenon where a firm simultaneously buys and makes the same good or service. The purpose of this paper is to develop propositions that suggest how concurrent sourcing affects performance.

Design/methodology/approach

Based on transaction cost, agency, neoclassical economic, knowledge‐based, and resource‐based theory, it is proposed to show how concurrent sourcing affects performance.

Findings

The paper argues that concurrent sourcing improves performance when firms face a combination of volume uncertainty, technological uncertainty, performance uncertainty, non‐decomposability, transaction‐specific investments, and strong internal and external capabilities.

Research limitations/implications

The paper maps the relationships between concurrent sourcing and performance and discusses how these relationships can be modelled. The propositions and discussion offer researchers a starting‐point for further research.

Practical implications

The propositions that are developed suggest that managers should consider using concurrent sourcing when they face problems caused by volume uncertainty, technological uncertainty, performance uncertainty, non‐decomposability, and asset specificity. Concurrent sourcing can also be a way to exploit both strong internal capabilities and external suppliers' strong capabilities.

Originality/value

The main contribution is a number of propositions, explanations, and discussions regarding how concurrent sourcing affects performance of the market and the hierarchy.

Details

Journal of Business & Industrial Marketing, vol. 25 no. 7
Type: Research Article
ISSN: 0885-8624

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Book part
Publication date: 27 August 2014

Thomas Mejtoft

For several hundreds of years printing has been the only effective channel for spreading mass communication. During the 1900s several new media channels have been invented…

Abstract

For several hundreds of years printing has been the only effective channel for spreading mass communication. During the 1900s several new media channels have been invented and, with the addition of the Internet, this has both changed the way media is consumed and has increased the competition between different channels. This qualitative case study of 37 firms reports on how relationships are used in the printing industry to relieve some of the impact of the competitive forces from new, and easily accessible, media as a means for marketing and, furthermore, on the impact on the printing industry as an industry. The results from the case study show that there are both internal and external effects of forming relationships and those vertical, as well as horizontal, relationships are of great importance to create a sustainable competitive situation for the printing industry. Relationships are used to increase both the strategic flexibility of the firm and the flexibility of the print media channel. Furthermore, the study illustrates that the printing industry, and print as a medium of communication, is drifting gradually away from the actual customer due to the new paradigm of value creation.

Details

Field Guide to Case Study Research in Business-to-business Marketing and Purchasing
Type: Book
ISBN: 978-1-78441-080-3

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Article
Publication date: 1 June 1997

Gary Cook

Looks fundamentally at the reasons for vertical integration. Specifically addresses the question of why vertical integration and close contractual equivalents have arisen…

Abstract

Looks fundamentally at the reasons for vertical integration. Specifically addresses the question of why vertical integration and close contractual equivalents have arisen in the petrol and brewing sectors of the UK. Reports the results of a comparative case study. Considers the ability of power and efficiency explanations to account for both the current pattern of vertical integration and its changes over time. Principally concludes the following: the recent history of vertical integration is better accounted for by efficiency rationales in the case of petrol and by market power in the case of brewing. Nevertheless, elements of both are present in each industry. Given the strong similarity in vertical and horizontal industry structure between these sectors, this implies that a case by case approach is preferable to a form‐based approach.

Details

Journal of Economic Studies, vol. 24 no. 3
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 5 February 2016

Erlinda N. Yunus and Suresh K. Tadisina

Supply chain integration (SCI) is a set of practices driven by many factors and circumstances. The purpose of this paper is to examine firms’ internal and external drivers…

Abstract

Purpose

Supply chain integration (SCI) is a set of practices driven by many factors and circumstances. The purpose of this paper is to examine firms’ internal and external drivers of SCI, evaluate the impact of the integration on firm performance, and further investigate the moderating role of organizational culture in strengthening the relationships between firms’ drivers and SCI.

Design/methodology/approach

For the purpose of this study, manufacturing firms were identified as the focal firms in supply chains, and thus data were collected through a survey of 223 Indonesian-based manufacturing firms. Two informants from each firm became the respondents. Structural equation modeling was used to analyze the data.

Findings

This study confirmed the positive relationship between SCI and firm performance. The results also indicated that internal driver, or specifically firms’ customer orientation (CO), triggered the initiation of SCI. Organizational culture, in terms of external focus, positively influenced the relationship between CO and SCI.

Research limitations/implications

This study illustrates the important role of organizational culture in determining the shape of the relationship between firms’ drivers and SCI. The results of this study enhance the understanding of SCI, especially related to types of organizational culture that could promote the integration.

Originality/value

This study brings a different dimension of SCI as this study provides evidence from a developing country, which might implement different practices as compared those of developed countries. This study provides a measure of internal drivers, which has not been empirically investigated. The new measure was tested and validated using a rigorous process, and thus could be employed in other studies with different settings.

Details

Business Process Management Journal, vol. 22 no. 1
Type: Research Article
ISSN: 1463-7154

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Article
Publication date: 29 July 2014

Daniel Nordigården, Jakob Rehme, Staffan Brege, Daniel Chicksand and Helen Walker

The purpose of this paper is to investigate an underexplored aspect of outsourcing involving a mixed strategy in which parallel production is continued in-house at the…

Abstract

Purpose

The purpose of this paper is to investigate an underexplored aspect of outsourcing involving a mixed strategy in which parallel production is continued in-house at the same time as outsourcing occurs.

Design/methodology/approach

The study applied a multiple case study approach and drew on qualitative data collected through in-depth interviews with wood product manufacturing companies.

Findings

The paper posits that there should be a variety of mixed strategies between the two governance forms of “make” or “buy.” In order to address how companies should consider the extent to which they outsource, the analysis was structured around two ends of a continuum: in-house dominance or outsourcing dominance. With an in-house-dominant strategy, outsourcing complements an organization's own production to optimize capacity utilization and outsource less cost-efficient production, or is used as a tool to learn how to outsource. With an outsourcing-dominant strategy, in-house production helps maintain complementary competencies and avoids lock-in risk.

Research limitations/implications

This paper takes initial steps toward an exploration of different mixed strategies. Additional research is required to understand the costs of different mixed strategies compared with insourcing and outsourcing, and to study parallel production from a supplier viewpoint.

Practical implications

This paper suggests that managers should think twice before rushing to a “me too” outsourcing strategy in which in-house capacities are completely closed. It is important to take a dynamic view of outsourcing that maintains a mixed strategy as an option, particularly in situations that involve an underdeveloped supplier market and/or as a way to develop resources over the long term.

Originality/value

The concept of combining both “make” and “buy” is not new. However, little if any research has focussed explicitly on exploring the variety of different types of mixed strategies that exist on the continuum between insourcing and outsourcing.

Details

International Journal of Operations & Production Management, vol. 34 no. 8
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 6 February 2009

Peter Broedner, Steffen Kinkel and Gunter Lay

The purpose of this paper is to present an empirical investigation of firm level productivity effects of outsourcing against the background of a review of recent…

Abstract

Purpose

The purpose of this paper is to present an empirical investigation of firm level productivity effects of outsourcing against the background of a review of recent theoretical considerations about the topic.

Design/methodology/approach

The empirical research is based on a large representative data set from the German manufacturing industries containing detailed data about almost 500 establishments. It investigates productivity effects of outsourcing under control of other relevant factors influencing firm level productivity by means of a multivariate regression analysis.

Findings

In sharp contrast to common belief and prevailing management practices, outsourcing, i.e. the extent to which the vertical range of manufacturing is reduced, has a strong negative impact on a firm's labour productivity. Against the background of the theoretical considerations reviewed from the literature, this result can be explained such that mere cost‐efficiency comparisons are insufficient for appropriate decisions on vertical manufacturing range as the effects of opportunism, of disturbed competence formation, and of limited innovative value creation processes may be overcompensating cost benefits.

Research limitations/implications

The investigation focuses on productivity effects of outsourcing as a relevant long‐term performance measure not regarding other firm level performance indicators. Although covering a significant range of industrial sectors in Germany, more empirical evidence is needed from other sectors and regions. Moreover, performance effects of different types of outsourcing implementations (e.g. simple part supply versus outsourcing of whole business processes including design, production, and marketing) should be investigated as they might have different impacts.

Practical implications

The findings strongly recommend a revision of established decision‐making schemes for vertical manufacturing range based on cost‐efficiency considerations. Decision making should instead integrate cost efficiency and transaction cost analysis with the competence and innovation capability formation perspectives. Procedural schemes for this integrated view are still to be developed, however.

Originality/value

The research described in this paper considerably widens the empirical knowledge about productivity effects of outsourcing and has strong impact on management practice.

Details

International Journal of Operations & Production Management, vol. 29 no. 2
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 23 June 2020

Dzung Dao Dong, Masahiro Moritaka, Ran Liu and Susumu Fukuda

Restructuring swine and pork value chain plays important role in agriculture reformation of Vietnam, the top global pork-lover and swine producer worldwide. This study…

Abstract

Purpose

Restructuring swine and pork value chain plays important role in agriculture reformation of Vietnam, the top global pork-lover and swine producer worldwide. This study aims at investigating the modernization of its entire swine-to-pork value chain.

Design/methodology/approach

This study combines the secondary data and primary data. The secondary data included the publications, procurements, databases from both worldwide and in Vietnam. Primary data comprised the results from field-trips in March 2018 and February 2019 that used in-depth interviews with representative key persons of involving stake-holders.

Findings

The prevalence of contract farming, vertical expansion and conglomerate mergers mainly boost vertical coordination in the industry, which creates three hierarchy paradigms of governance named the full- and semi-vertically integrated model, and the formal coordinating relation institution. Consequently, consolidation has occurred and lead the swine and pork value chain toward modernization.

Research limitations/implications

This study generalizes its first trends of the modernization of the swine-to-pork industry instead of provides its concreted impacts to the involved stakeholders.

Social implications

Swine and pork industries retain historical and socio-political issues in Vietnam. Social problems are going to raise if number of traditional swine producers are failed in the competition from the equipped large-scale producers leading by the giant vertically-integrated contractors.

Originality/value

This study provides the empirical synthesis of the vertical coordination in entitle swine and pork value chain of Vietnam through combining the view of the strategic alliance of the firm and global value chain governance.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 10 no. 5
Type: Research Article
ISSN: 2044-0839

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Article
Publication date: 1 January 2000

HENG LI, EDDIE W.L. CHENG and PETER E.D. LOVE

Since the emergence of partnering in the construction industry in the late 1980s, it has received a great deal of attention from practitioners and researchers. The…

Abstract

Since the emergence of partnering in the construction industry in the late 1980s, it has received a great deal of attention from practitioners and researchers. The published research that is presented in the major journals typically advocates guidelines and models for implementing partnering. To date, however, no paper has attempted to summarize and present a critique of the existing partnering literature. This paper, therefore, reviews the partnering literature that has been published in four high quality rating journals, these being Construction Management and Economics. ASCE Journal of Construction Engineering and Management, Engineering, Construction and Architectural Management and ASCE Journal of Management in Engineering. It is concluded that there were four major themes of empirical studies, which were research on project partnering, examining a dual relationship, international partnering and a special application of partnering. Moreover, nonempirical studies were classified as the types of partnering, partnering models, partnering processes and partnering structure. The review provided in this paper ‘polishes the signposts’ and offers new directions for partnering research and its application in construction. Future studies are recommended to emphasize on the identification of performance measures and critical success factors, development and test of partnering models and processes, and the formation and selection of partnering strategy.

Details

Engineering, Construction and Architectural Management, vol. 7 no. 1
Type: Research Article
ISSN: 0969-9988

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