DOI: 10.5176/2010-4804_2.2.209
Authors: Dr. Brion Scudder, Dr. Framarz Byramjee
Abstract:
The vertical integration decision poses strategic challenges for a firm’s marketing channels’ decision prerogatives which drive its business strategy. This paper explicates those putative benefits of vertical integration as organizational strategy adopted by firms for alleviating respective transaction costs and optimizing
functional governances of the business system in the enterprise. The discourse concentrates on the dynamics of the varied vertical integration mechanisms like joint ventures, mergers, and contracting agreements practiced by firms to serve as risk reduction strategies in the business exchange process.
Keywords: vertical integration, transaction costs, joint ventures, mergers, contracting agreements.
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