How they do it: Netflix’s core offering is providing the infrastructure and user interface for customers to watch content on the platform. The content in form of movies, shows etc. is usually not produced by Netflix (although they started producing their own shows and movies as well). As such Netflix can focus on the technical site of their platform as well as on user acquisition and license content from rights owners.
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How they do it: Unlike other apparel retailers, Zara does not outsource production of its garments to low-cost manufacturing countries, but operates a number of factories in Spain and other European countries to produce the majority of products in-house. Integrating the different steps in the value chain enables Zara to respond to fashion trends very quickly, in turn positioning them as a leader in the industry.
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How they do it: Automakers such as Ford are a typical example of integrators, as they control the whole product process from engineering and manufacturing to marketing and sales but ultimately source a lot of the parts from suppliers. They have strong partnerships with different suppliers and worked collaboratively on developing the individual parts for each model. This allows the suppliers to focus on specific applications of their part and build expertise whereas the OEM can focus on assembly and marketing.
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How they do it: For products directly sold by Amazon in its online store, Amazon controls the whole value chain starting from the point of finished manufacturing. Own branded items allow the company to determine price and availability in its store and also allow for preferred promotion of own-brand products with a potential higher margin.
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How they do it: Standard Oil Company’s successful, but illegal, integrator strategy ultimately lead to its demise. In a landmark case, the U.S. Supreme Court dismantled it in 1911, as it was ruled to be an illegal monopoly. Standard Oil dominated the oil products market initially through horizontal integration in the refining sector, then, in later years vertical integration alongside the value chain, streamlining production and logistics, lowering costs, and undercutting competitors.
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