Successful vertical integration

1
Successful vertical integration

• Merck-Medco vertical integration in the
  pharmaceutical industry
• Go downstream
• Honeywell (embedded services)
• GE (comprehensive services)
• Nokia (integrated solutions
• Coca Cola (distribution control)

Source HBS, HBR
2
To integrate or not in emergent industries

• eBricks.com
• Where to compete?
• Online market linking subcontractors to
  distributors
• Second opportunity linking distributors and
  manufacturers
• Issues to consider
• Are there synergies to participating both
  upstream and downstream
• Acceptance by distributors
• Can a startup with 25 employees target both
  markets?

Source HBS
3
Chevron acquires Texaco

• Value of the deal 34 billion
• Consolidation to create the worlds fourth
  largest oil concern
• Importance of scale and size in competing with
  supermajors
• Merging two company cultures - integration

Source NY Times, Chevron, Texaco web sites