International Trade

Topics: Monopoly, Economics, Perfect competition Pages: 97 (35536 words) Published: June 18, 2013
I. Vertical Integration
II. Horizontal integration
III. Economies of scale
IV. Economies of scope
V. Economic efficiency
VI. Proprietary(property or ownership) Know-how
VII. Monopoly
VIII. Oligopoly
IX. perfect competition (pure competition) business definition X. workable competition business definition
XI. Cost leadership
XII. Differentiation (economics)
XIII. Barriers to exit
XIV. Inventory flow
XV. Incoterms
XVI. Multinational Corporation
XVII. Parent company
XVIII. Decentralization
XIX. Centralisation
XX. License
XXI. Intellectual property
XXII. Copyright
XXIII. Patent
XXIV. Legal monopoly
XXV. Trademark
I. Vertical integration
In microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need. It is contrasted with horizontal integration. Vertical integration has also described management styles that bring large portions of the supply chain not only under a common ownership, but also into one corporation (as in the 1920s when the Ford River Rouge Complex began making much of its own steel rather than buy it from suppliers). Vertical integration is one method of avoiding the hold-up problem. A monopoly produced through vertical integration is called a vertical monopoly. Nineteenth-century steel tycoon Andrew Carnegie's example in the use of vertical integration[1] led others to use the system to promote financial growth and efficiency in their businesses. Three types

Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers. Contrary to horizontal integration, which is a consolidation of many firms that handle the same part of the production process, vertical integration is typified by one firm engaged in different parts of production (e.g. growing raw materials, manufacturing, transporting, marketing, and/or retailing). There are three varieties: backward (upstream) vertical integration, forward (downstream) vertical integration, and balanced (both upstream and downstream) vertical integration. * A company exhibits backward vertical integration when it controls subsidiaries that produce some of the inputs used in the production of its products. For example, an automobile company may own a tire company, a glass company, and a metal company. Control of these three subsidiaries is intended to create a stable supply of inputs and ensure a consistent quality in their final product. It was the main business approach of Ford and other car companies in the 1920s, who sought to minimize costs by integrating the production of cars and car parts as exemplified in the Ford River Rouge Complex. * A company tends toward forward vertical integration when it controls distribution centers and retailers where its products are sold. Examples

One of the earliest, largest and most famous examples of vertical integration was the Carnegie Steel company. The company controlled not only the mills where the steel was made, but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore and the railroads that transported the coal to the factory, the coke ovens where the coal was cooked, etc. The company also focused heavily on developing talent internally from the bottom up, rather than importing it from other companies.[2] Later on, Carnegie even established an institute of higher learning to teach the steel processes to the next generation. American Apparel

American Apparel is a fashion retailer and manufacturer that advertises itself as a vertically integrated industrial company.[3][4] The brand is based in downtown Los Angeles, where from a...
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