Operations & execution systems · strategy atlas
Vertical integration
what it means
Owning more stages of your own supply or distribution chain — from raw material to manufacturing to retail — rather than depending on external partners at each stage.
a real example
Fashion retailers who own design, manufacturing, and retail stores directly can move a design from sketch to shelf far faster than competitors dependent on external manufacturers at every stage.
when to use it
When speed, quality control, or margin capture depends critically on stages currently controlled by external partners who don't share the same incentives.
when it backfires
Owning stages the business has no real expertise in adds complexity and fixed costs without the flexibility external specialists would have provided.