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: Lufthansa’s product offering to passenger is the flight from location A to B. However, the company performs only the actual flight but not the process steps before and after such as baggage handling, airport service and maitenance etc.. This is usually performed by 3rd parties which are not paid by the customer though but paid for by Lufthansa.
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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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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: Carnegie steel controlled not only the mills where the steel was made, but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore and the railroads that transported the coal to the factory, the coke ovens where the coal was cooked, etc.
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