0421，Keeping it under your hat

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张海霞老师

1、Apple and Tesla are two of the world's most talked-about companies. They are also two of the most vertically integrated. Apple not only writes much of its own software, but designs its own chips and runs its own shops.

2、In his 1926 book “Today and Tomorrow” Henry Ford wrote that vertical integration was the key to his success: “If you want it done right, do it yourself.”

3、Controlling it all made sense, the argument went, when markets were rudimentary: when supplies of vital materials were limited or contractors could cheat you.

4、Now many startups in Silicon Valley pride themselves for being “full stack”.

5、Reasons for the reversal abound, but five stand out. The most important is simplicity.A second reason is that firms operating on the technological frontier often find it more efficient to do things in-house.A third reason is choice: the more the market has to offer, the more important it is to build a relationship with customers.Choice is reinforced by speed: fashion brands such as Spain’s Zara have resisted contracting out everything.And then there is a combination of old worries about geopolitical uncertainty and new worries about the environment.

6、The renewed fashion for vertical integration will not sweep all before it. For the most mundane products the logic of contracting out still reigns supreme. And today’s bundling is less ambitious than Henry Ford’s.That said, striking the right balance between doing things in-house and contracting things out is clearly much more complicated than it was in the days when Tom Peters and his fellow gurus told companies to focus on what they do best and outsource the rest.