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Vertical Integration-Air Transport Economics - YouTube
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hello everybody today we are going to
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talk about vertical integration budget
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integration describes the company's
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control over several of the production
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and distribution steps involved in the
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creation of its product or service
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vertical integration is to be fired by
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one firm engaged in different parts of
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production there are three types of body
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conditions backward forward and balanced
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balanced Matic innovation is a
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combination of both backward and forward
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backward but in english n' is that a
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company controlled subsidiaries that
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produce some of the inputs used in the
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production of its product for vertical
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integration is a company controls
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distribution centers and we tell us
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where its products are sold businesses
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are backward or forward of each other
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depending on whether they are nearer to
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or further away from the final consumer
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integrations are implemented for a
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number of reasons extend capabilities by
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controlling inventory quality timing and
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availability improving distribution
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channels utilizing enhancements in
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technology and innovation to extend
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competitive advantage successful
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vertical integration can have a positive
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effect on the company's profits one of
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the biggest advantages of vertical
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integration is that it often creates
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economies of scale and lowest production
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costs because it reduces many of the
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price markups in each production step
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vertically integrated companies also
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achieve cost efficiencies by controlling
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quality at each step which reduces
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repair costs returns and downtime in
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addition vertical integrated companies
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do not have to allocate resources to
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pricing contracting paying and
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coordinating with third-party vendors
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vertical integration can ultimately
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create barriers to entry from potential
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competitors especially if the company
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control access to some of the resource
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involved in what
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action this is why in some cases a
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company may control so much of the
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market or supply of raw materials that
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vertical integration can raise antitrust
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concerns the benefits of vertical
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integration come from the greater
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capacity gives colonization's to control
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access to inputs while vertical
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integration will result in the number of
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competitive advantages it can also
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create its own problems the differ
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accordingly to the state of Technology
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in the industry involved roughly
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corresponding to the stages of the
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industry life cycle first there is the
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high coordination cost starting a new
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business or acquiring one can severely
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restrict the amount of capital available
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for new opportunities in the origin
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companies marketplace additionally a
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vertical push might have a diluting
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effect on the core business putting too
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much focus on the new venture again and
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expense of the old also if a product is
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a great success they may have a
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difficult time responding to demand as
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their manufacturing capabilities are
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less dynamic and the specialization in
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manufacturing prevents and the supplies
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from ramping up to meet this demand
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finally buttock expansion requires
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commitment going into it and repair can
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leave the core business with a number of
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problems such as under supply limited
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distribution and shoddy customer
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relations in technology April 4 for 35
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years has champion a vertical model
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specifically with many elements of the
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ecosystem for the iPhone and iPad we
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have hardware and software designed by
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Apple which also design its own
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processes for the devices the
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pre-casters sells its own hardware
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software and services directly to
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consumers this integration has allowed
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Apple to sell the place for mobile
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computing airlines have also been
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affected by integration
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British Airways wanted to merge with
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American Airlines but I intend declined
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a proposal as they would be able to
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dominate the pricing of transatlantic
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flights from the UK where the
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configuration has reduced the
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competition within the industry as
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Morgana's asians are banished other out
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to expand due to the demand that has
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been received from the public for their
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products and services companies that
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integrating are able to set the price
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and smaller companies will be unable to
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complete the release that larger
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companies stay when integrating is more
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compared to the independent
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organizations my company explains its
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business in two areas there are at
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different points on the same production
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path such as when the cup manufacturer
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owns its supplier and distributor but
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the co-integration can help companies
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reduce cost and improve efficiency but
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decreasing transportation expenses and
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reducing turnaround time however
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vertical integration is a difficult
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strategy for companies to implement
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successfully it is often expensive and
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hot rivers upstream producers frequently
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integrate with downstream distributors
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to secure a market for the output this
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is fine when the times are good by many
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firms have found themselves cutting
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prices sharply to the Austrian
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distributors when demand has just fallen
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so they can maintain target levels of
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planned utilization
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