The article’s relevance is realized through the subject of its discussion: benefits and limitations of vertical integration in the influential companies’ conglomerate attempts.
While horizontal integration is defined as the development of an organization’s products at one particular level, vertical integration presupposes the company’s command of the whole supply chain (“How Apple made ‘Vertical integration’ hot again – too hot, maybe,” 2012). Many “technology titans” currently resemble the “vertically integrated conglomerates” while trying to copy Apple’s prosperity (“How Apple made ‘Vertical integration’ hot again – too hot, maybe,” 2012, par. 2).
The conglomerate merger represents the union of enterprises engaged in disparate business spheres. This combination model, according to Lawrence Hrebiniak, presents a threat to the partners because they may fail to stay concentrated and, as a result, lose their regulatory function (“How Apple made ‘Vertical integration’ hot again – too hot, maybe,” 2012).
Although various types of integration look promising for the business to progress, they still present some risks. There is a need for learning a lot of new skills. Also, technology companies have to deal with different management difficulties. Finally, specialists believe that technologies’ progress may decrease if a company will need to balance various tasks (“How Apple made ‘Vertical integration’ hot again – too hot, maybe,” 2012).
However, Kendall Whitehouse believes that despite the dangers, the organizations find growing into unfamiliar fields a rather attractive idea. She suggests that “tech companies” could learn from the errors of previous conglomerates and become successful (“How Apple made ‘Vertical integration’ hot again – too hot, maybe,” 2012, par. 6).
Reference
How Apple made ‘Vertical integration’ hot again – too hot, maybe. (2012). Time. Web.