Strategic Management: Formulation and Implementation

Stages Of Integrated Activities

Figure 8-2 shows that firm A has more stages that firms B or C, because its activities extend from ultra-raw materials to retail outlets, but firm C is engaged in a greater number of steps in the vertical chain.

Degree Of Internal Transfers

The degree of integration is the proportion of the resources transferred internally, and fully integrated firms transfer almost 100 percent of particular services or material in-house. In Figure 8-2 firms A and B are "fully integrated"; firm C is "taper integrated".