vertical disintegration

Vertical Disintegration

The separation of one company into several, with each performing activities leading to a single, finished product. Vertical disintegration occurs generally because diseconomies of scale, which are the result of inefficiency due to large size, make it more advantageous than remaining one corporation.

vertical disintegration

the withdrawal of a firm from a particular stage in a vertically linked production and distribution chain.

A firm which is currently vertically integrated into a number of stages may decide to exit from a particular stage for cost or strategic reasons. For example, as a result of technical advances or a change in competitive conditions, it may be cheaper for the firm to buy in materials from outside suppliers than continue to self-supply (see MAKE OR BUY); or the emergence of new distribution channels for the firm's products may remove the imperative for it to own distribution outlets. In some cases the volatility of profits in the face of cyclical downturns in demand or a long-term secular decline in demand may force a firm to reduce the size and depth of its investment in a multi-stage operation. See VERTICAL INTEGRATION, SOURCING, OUTSOURCING, DIVESTMENT, VIRTUAL CORPORATION.

vertical disintegration

the withdrawal of a firm from a particular stage in a vertically integrated production and distribution chain. A firm that is currently vertically integrated into a number of stages may decide to exit from a particular stage for cost or strategic reasons. For example, as a result of technical advances or a change in competitive conditions, it may be cheaper to buy in materials from outside suppliers than to continue to self-supply, or the emergence of new distribution channels for the firm's products may remove the imperative for it to own its own distribution outlets. In some cases, the volatility of profits in the face of cyclical downturns in demand and a long-term secular decline in demand may force a firm to reduce the size and depth of its investment in a multi-stage operation. See VERTICAL INTEGRATION, DIVESTMENT.

单词	vertical disintegration
释义	vertical disintegration Vertical Disintegration The separation of one company into several, with each performing activities leading to a single, finished product. Vertical disintegration occurs generally because diseconomies of scale, which are the result of inefficiency due to large size, make it more advantageous than remaining one corporation. vertical disintegration the withdrawal of a firm from a particular stage in a vertically linked production and distribution chain. A firm which is currently vertically integrated into a number of stages may decide to exit from a particular stage for cost or strategic reasons. For example, as a result of technical advances or a change in competitive conditions, it may be cheaper for the firm to buy in materials from outside suppliers than continue to self-supply (see MAKE OR BUY); or the emergence of new distribution channels for the firm's products may remove the imperative for it to own distribution outlets. In some cases the volatility of profits in the face of cyclical downturns in demand or a long-term secular decline in demand may force a firm to reduce the size and depth of its investment in a multi-stage operation. See VERTICAL INTEGRATION, SOURCING, OUTSOURCING, DIVESTMENT, VIRTUAL CORPORATION. vertical disintegration the withdrawal of a firm from a particular stage in a vertically integrated production and distribution chain. A firm that is currently vertically integrated into a number of stages may decide to exit from a particular stage for cost or strategic reasons. For example, as a result of technical advances or a change in competitive conditions, it may be cheaper to buy in materials from outside suppliers than to continue to self-supply, or the emergence of new distribution channels for the firm's products may remove the imperative for it to own its own distribution outlets. In some cases, the volatility of profits in the face of cyclical downturns in demand and a long-term secular decline in demand may force a firm to reduce the size and depth of its investment in a multi-stage operation. See VERTICAL INTEGRATION, DIVESTMENT.
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