Bridging the gap: state-of-the-art on vertical integration

Abstract

Purpose – This paper aims to present the vertical integration state-of-the-art and propose an expansion of the operations and supply chain management (OSCM) field by identifying gaps and bottlenecks. Design/methodology/approach – This paper uses a systematic literature review based on a sample of 173 OSCM field articles, collected from Scopus and Web of Science databases. Findings – There are no single factors, such as future costs, structures or skills development, in the decision to vertically integrate operations. It is necessary to combine the vision of production costs with the perspective of governance and transaction costs. In addition, it is essential to consider the competency perspective and its impact on capability building. Research limitations/implications – Few studies have attempted to understand how vertical integration is used in terms of OSCM research themes and theories. Vertical integration can help companies face challenges and serve as a potential solution for achieving better prices, demand control and quality management. Practical implications – The significant role of vertical integration mechanisms in supply chains is crucial for managers evaluating a firm's reconfiguration with more vertical operations. Policymakers interested in supporting the smoothness of vertical integration decisions in regulatory agencies play a key role as contingencies. Social implications – In times of global challenges, vertical integration is a strategy known to be more effective for firms to obtain a competitive advantage, making them more resilient. Originality/value – This paper addresses gaps in the vertical integration theme and provides insights for future research development.

Keywords

• Vertical integration
• Strategy
• Operations
• Supply chain
• Review