Verticle integration is a concept that most of us have heard before: the strategy whereby a company either owns or controls its suppliers, distributors, or retail locations.
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At the beginning of the pandemic, the majority of companies experienced an unprecedented amount of change. As restrictions on travel and the movement of goods been put in place, many companies were cut off from their suppliers in other parts of the world, forcing them to redefine how they run their businesses. In 2020, vertical integration will be one strategy leveraged by firms who embrace the change brought on by 2020 and use it as an opportunity to generate significant value for their company.
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Even before the pandemic, some of the world’s top firms saw the value of adopting a vertical integration strategy. In 2009, Microsoft decided to open retail stores across the globe. This one decision helped to generate significant value for Microsoft by providing control over their distribution and creating a showcase for staple products such as the company’s Surface and Xbox hardware, as well as a selection of third-party PCs.