Quasi Vertical Integration

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Quasi Vertical Integration
Fiona, Australia
Hi, I would like to know, is quasi-vertical integration the same as vertical integration? If there is a difference, what is it?

The Difference Between Two Forms of Integration
Dali Horeshka, Business Consultant, Albania
In my opinion the differences are related to 1. prices, 2. standards on quality, 3. agreement on rules to implement for being engaged within the same consortium or association, and 4. avoidance financial obligations to the state (tax).
For example. One of the main reasons farmers and industrialist are in conflict with each other is the level of purchasing price for the farmers' product versus the selling prices the industrialist can use to their consumers. The difference determines the level of the margins per unit of product and per working hour. The less difference or margin exist, the more functional is integration.
Another example: I pay taxes while you do not pay them. Consequently we have a different product cost level and you may sell with lower prices or have a higher margin.

Quasi-Vertical Integration
Jaap de Jonge, Editor, Netherlands
@Dali Horeshka: QVI is the ownership by 1. a downstream firm (= further in the supply chain, closer to the point of end consumption) or by 2. an upstream firm of specialized tools and equipment or assets used in the primary processes of 1. its supplier(s) or 2. its customer(s).
An example of the first is an automotive assembler owning all special tools utilized by a dashboard manufacturer to fabricate its dashboards. An example of the second is a beer brewer owning all inventory of the bars that are selling (only) its beer brand.
In QVI, the controlling firm also has a powerful position, but obviously less powerful than in (real) vertical integration, when the controlling firm actually owns his supplier or customers.



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