Re:IBM is splitting itself into two public companies
by kevindong on Thursday October 08, 2020 @03:52PM
(#24723128)
Vertical integration is high risk, high reward in that if each component in the stack is a market leader in their industry, the overall company becomes exponentially more valuable.
On the other hand if any component is non-competitive, the other components in the stack are still obligated to give that unperformant component their business. Which reduces the pressure to perform and causes the overall company to gradually become less competitive.
I think a good example of this would be Intel designing chips and also owning the fabrication plants. It's no secret that Intel has been to fabricate their chips for a while now.
On the other hand if any component is non-competitive, the other components in the stack are still obligated to give that unperformant component their business. Which reduces the pressure to perform and causes the overall company to gradually become less competitive.
I think a good example of this would be Intel designing chips and also owning the fabrication plants. It's no secret that Intel has been to fabricate their chips for a while now.