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Article Review Assignment 2
For this weeks article review assignment, I have chosen “Companies More
Prone to Go ‘Vertical’” by Ben Worthen, Cari Tuna and Justin Scheck from the Wall
Street Journal. This article was highly reviewed and came from a credible source,
which makes for a great paper to write about regarding the vertical integration in
business. The article discusses the path in which Larry Ellison and Oracle Corp. took
to transforming their business into a maker of software, computers, and computer
components. Larry Ellison is one of the many executives out there reviving the
“vertical Integration,” a very old strategic plan where the single company controls
materials, manufacturing and distribution. Many big companies are looking at this
with different reasons, some want more control over raw materials, while others
like Pepsi want more authority over distribution. Some examples the article talks
about are GM and Boeing in their move to assure quantity and quality of vital parts
from troubled suppliers. “The Pendulum has shifted from disintegration to
integration,” says Harold Sirkin, global head of the Boston Consulting Group’s
operations practice.
The article moves towards how the past half century companies were
increasingly becoming specialized, shifting functions like manufacturing and
outsourcing their raw materials to others. How in the 1980s Steelmakers was selling
their mining operations and how in the 1990s the big auto guys were getting their
parts from suppliers. The belief was that specialization would help enhance the
