Vertical Integration vs. Outsourcing “Following the Crowd”

Topics: Supply chain management, Vertical integration, Andrew Carnegie, Supply chain, Strategic management / Pages: 29 (7039 words) / Published: Oct 9th, 2008
Vertical Integration vs. Outsourcing
“Following the Crowd”

Collaboration issues in an SCM context

Table of Content

1. Thesis and Introduction
1.1 Thesis
1.2 Purpose
1.3 Introduction into the topic

2. Logical Problems and Sub-questions

3. Methodology and Justification of Sections

4. Literature Review
4.1 Literature Concerning the Terminology
4.2 Literature Concerning the Main Theories of Outsourcing and Vertical Integration and the Examples of Carnegie Steel Company and Nike
4.2.1 Literature Concerning Vertical Integration and Carnegie Steel Company
4.2.2 Literature Concerning Outsourcing and Nike

5. Vertical Integration
5.1 The Concept
5.1.1 Introduction into the Concept
5.1.2 Advantages, Reasons, Goals
5.1.3 Disadvantages and Deficiencies The Example of Carnegie Steel Company

6. Outsourcing
6.1 The Concept
6.1.1 Introduction into the Concept
6.1.2 Advantages, Reasons, Goals
6.1.3 Disadvantages and Deficiencies
6.2 The Example of Nike

7. Antagonism in the Goal of Improved Cooperation and Production flow
7.1 Conflicts in an Integrated Supply Chain
7.1.1 In-house Collaboration vs. B2B- Collaboration
7.1.2 The Reliability of Third-World Suppliers and Quality Considerations
7.2 Giving up Profit Margin Advantages

8. Conclusion and Outlook

9. References

1. Thesis and Introduction

(1.1) Thesis

The concept of vertical integration has evolved at the end of the 19th century and from then on succeeded throughout decades, helping blue chip companies to gain large profits and to gain market shares that are unimaginable today. In the 1980ies however, after the first two decades of intensive research in strategic management had passed the time of outsourcing as the new “promise of heaven and earth” began, caused by the widely perceived need to delegate non-core operations from internal processes (especially production) to external companies and by the



References:  M. Christopher- Logistics and Supply Chain Management, Prentice Hall, 2005  W  W. Sharkey-The Theory of Natural Monopoly, Cambridge University Press, 1982  Martin K.Perry- Vertical Integration: Determinants and Effects  Alred Rappaport- Creating Shareholder Value, 1986  http://www.investorwords.com  Randolph Bourne- Trans-national America, Atlantic Monthly, 1916  James H Times Books, 2005  Walter Licht- Industrializing America: The 19th century (The American Moment), The Johns Hopkins University Press 1995

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