Explaining vertical integration strategies: market power, transactional attributes and capabilities

Citation

Diez-Vial, I. (2008), "Explaining vertical integration strategies: market power, transactional attributes and capabilities", Strategic Direction, Vol. 24 No. 2. https://doi.org/10.1108/sd.2008.05624bad.007

Explaining vertical integration strategies: market power, transactional attributes and capabilities

Explaining vertical integration strategies: market power, transactional attributes and capabilities

Diez-Vial I. Journal of Management Studies, September 2007, Vol. 44 No. 6, Start page: 1017, No. of pages: 24

Purpose – proposes and tests a model to analyze firm vertical boundaries. Design/methodology/approach – explores vertical boundaries of firms by presenting a model that proposes how industrial, transactional and other firm-specific factors influence when and to what extent firms vertically integrate. Drawing on the relevant literature, presents a number of hypotheses that were then tested on data gathered from across the entire Spanish meat industry value chain. Findings – reports how vertical integration strategies were driven by aspects related to industrial structure, transactional attributes and internal capabilities. Reveals, among other things, how firms undertake new stages to both reduce transaction costs between complementary and specific stages and share their internal capacities and knowledge among similar phases of the value chain. Research limitation/implications – limited to one industry; examine how the competitiveness of the stages influences the investment in specific assets. Originality/value – identifies some of the factors that need to be taken into account when making a choice between different vertical integration strategies.ISSN: 0022-2380Reference: 36AZ008DOI: 10.1111/j.1467-6486.2007.00693.x

Keywords: Corporate strategy, Decision making, Organizational structure, Strategic management