Choose a company with both online and brick and mortar presence. What is the vertical integration...

Choose a company with both online and brick and mortar presence. What is the vertical integration strategy? Do the two models differ? Why or why not?

Expert Solution

A company with both online and brick and mortar presence is Amazon. Recently Amazon has opened offline stores to cater to the increasing demand of the customers and sells books, groceries, daily essentials etc through these stores as well in order to make it convenient for their customers. Apart from that, Amazon is already present online and is one of the biggest online ecommerce companies in the world offering a range of products and sevices under various categories. The vertical integration strategy of Amazon has been to offer all the products and services through different medium to make it convenient for it's customers but under the same umbrella. This allows them to increase the sale of their products and services and generate better revenue. The two models differ in terms of delivery and distribution of products to the customers. In online model, the distribution cost to the final customer needs to be borne by the company which increases their cost of delivery whereas in offline model, the customers themselves pick up the products from the store, making it more convenient and less costly for the company and helps it to save on distribution cost as well. However the investment cost and cost of opening offline store is more as compared to online store.

keosha answered 8 months ago

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