4 ms·
(Potentially) making a better product does not mean better for a consumer, especially when a company has a dominant share of the marketplace. It potentially me
by Arainach 11mo ago
(Potentially) making a better product does not mean better for a consumer, especially when a company has a dominant share of the marketplace.
It potentially means you can only get parts going through the company that sells the complete product.
It potentially means that you have to pay whatever price the company sets because they control the distribution pipeline.
- zer00eyz 11mo agoVertical integration has ZERO to do with any sort of market dominance. A company could be vertically integrated, and have a small portion of the market. A company could be a full on monopoly and have little to no vertical integration. YKK processing raw metals and plastics, building its own zipper making machines has nothing to do with how much market share it has. It has everything to do with product quality. Faunc is another example of "vertical integration" where they make the mills, software and controllers for their devices, as well as servos and spindles. Servos and spindles are commodity items (you can buy them cheaply from china) yet Faunc makes their own for quality and reliability reasons.
- s1mplicissimus 11mo agoYou are correct that a high degree of vertical integration does not necessitate market dominance. I would like to add some nuance though: As the supply chain becomes longer, the value of vertical integration rises. Now if we acknowledge that bigger players can profit more from vertical integration as well, and assume that players play equally well, we have a "devil poops on the big pile" situation, pulling the market towards a monopoly as the bigger player gets to profit more. So it's not got exactly ZERO to do with market dominance ;)