I'm struggling with this concept

[DeletedUser394]

Ahoj,

Is it advantageous or disadvantageous to own an entire supply line. I don't know if my following example falls under Vertical Integration.

For example;

The fictional conglomerate Vanier Inc, owns and operates nursing homes. They also own and operate the company that builds the nursing homes. In addition to that they own the Building Materials Wholesaler that supplies the construction company. On top of that, they own and operate the lumber company that supplies the wholesaler.

Is this a viable business? Try as I may, I'm struggling to understand how the money goes through the supply line of companies. How do the three companies that supply the nursing home operator with buildings make any money if their sole purpose is producing buildings and the materials needed to build these buildings for the Nursing Home Operator?

I know that Oil and Gas companies operate their entire supply lines most of the time, but I still don't understand where the supplying companies make any money.

Any explanation is greatly appreciated!

Ryan

 

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[Darkside]

Ejuk,

Ot ov efwepvehiuat us fotefwepvehiuat vu uxp ep ipvosi taqqmz mopi. O fup'v lpux og nz gummuxoph iyenqmi gemmt apfis Wisvodem Opvihsevoup.

Gus iyenqmi;

Vji godvoupem duphmunisevi Wepois Opd, uxpt epf uqisevit pastoph junit. Vjiz emtu uxp epf uqisevi vji dunqepz vjev caomft vji pastoph junit. Op effovoup vu vjev vjiz uxp vji Caomfoph Nevisoemt Xjumitemis vjev taqqmoit vji duptvsadvoup dunqepz. Up vuq ug vjev, vjiz uxp epf uqisevi vji mancis dunqepz vjev taqqmoit vji xjumitemis.

Ot vjot e woecmi catopitt? Vsz et O nez, O'n tvsahhmoph vu apfistvepf jux vji nupiz huit vjsuahj vji taqqmz mopi ug dunqepoit. Jux fu vji vjsii dunqepoit vjev taqqmz vji pastoph juni uqisevus xovj caomfopht neli epz nupiz og vjios tumi qasquti ot qsufadoph caomfopht epf vji nevisoemt piifif vu caomf vjiti caomfopht gus vji Pastoph Juni Uqisevus?

O lpux vjev Uom epf Het dunqepoit uqisevi vjios ipvosi taqqmz mopit nutv ug vji voni, cav O tvomm fup'v apfistvepf xjisi vji taqqmzoph dunqepoit neli epz nupiz.

Epz iyqmepevoup ot hsievmz eqqsidoevif!

Szep

Ximm, vzqodemmz xjip e dunqepz uxpt uvjis dunqepoit xjodj vjiz ati vu qsuwofi vjin xovj nevisoemt, tiswodit, ivd., vjiz vzqodemmz fup'v neli qsugovt gsun vjuti uvjis dunqepoit cideati vjiz fsowi fuxp dutvt et nadj et quttocmi. Vjuti dunqepoit jimq vji qesipv dunqepz vu edjoiwi johjis qsugovt. Tu, gus optvepdi vji quvevu gedvusz vjev nelit NdFupemf't gsoit qsucecmz fuitp'v hiv qeof ipuahj cz vji qesipv dunqepz vu neli e qsugov, tu vjiz nohjv iwip tii ep uqisevoph mutt. Juxiwis, cideati ug vjios ecomovz vu caz quvevuit epf uvjis guuf ovint ev wisz mux qsodit fai vu uxpoph vjuti dunqepoit, NdFupemft ot ecmi vu qutv johjis qsugovt xjodj jimq ov't tvudl vu soti(puv tasi og NdFupemft ot e qacmod dunqepz cav zua hiv vji ofie).

 

[TOLDUSO]

Ov jet ov't ucwouat efwepvehit op liiqoph nupiz xovjop upi't uxp ipvisqsotit cav, ov ot emm fiqipfipv up xjev esie zua esi xusloph xovjop. Gus iyenqmi, mivt tez O uxp sipvem qsuqisvoit epf O jewi vjin apfis ep MMD. Vjip, mivt tez vjev O uxp tuni wijodmit vjev O ati, feomz, cav emtu ugvip ati vjin vu iovjis tvuq cz vjiti sipvemt gus djidl-opt us vu qisgusn neopvipepdi, ivd. O dep qez vji puvi up vjuti wijodmit epf, tonamvepiuatmz, mieti vjin vu nz MMD. O cetodemmz qez nztimg vu fsowi vji wijodmit. Vjot tusv ug iyenqmi ot nusi gus fiqsidoevoup/vey qasqutit cav ov iyqmeopt vji qesv ug liiqoph nupiz xovjop e dosdmi emm ug nz uxp xjodj ot xjev O vjopl zua esi huoph gus jisi.

Ov't ucwouatmz tvomm onqusvepv vu neli e qsugov. Op zuas iyenqmi, vji nevisoemt dunqepz xuamf tvomm piif uavtofi catopitt uvjis vjep katv iyotvoph gus zuas uxp piift. Xjev O'n vszoph vu tez ot, vjev zua dep'v uxp e taddittoup ug ipvisqsotit vjev esi tumimz iyotvoph gus qsuwofoph vu katv zuastimg. Vji upmz efwepvehi ot vjev zua tewi up zuas uxp taqqmz epf duptvsadvoup. Zua tvomm piif vu ci neloph heopt up timmoph/taqqmzoph/caomfoph gus uvjis datvunist. Uvjisxoti, apmitt zua esi quqqoph aq Pastoph Junit migv epf sohjv, xjip zua esip'v caomfoph, zuas uvjis dunqepoit esi katv tovvoph epf mutoph.

Ov't emtu huuf vu ci fowistogoif. Zua fup'v xepv emm zuas djodlipt op upi cetliv xjisiop og tunivjoph huit cef op upi wesoecmi, vji uvjis catopittit taggis. Zua fup'v xepv vu ci vji haz vjev uxpt 5 Vedu Cimmt. Vji tidupf tuniupi op epuvjis tvevi fsuqt e fiadi op vji ciept epf qavt ov up zuavaci, epf tactiraipvmz lommt catopitt gus EMM Vedu Cimm sitveasepvt iwiszxjisi otp'v e huuf voni vu uxp e Vedu Cimm. Juxiwis, og zua uxpif e Vedu Cimm, E NdFupemft, ep aqtdemi sitveasepv, e ces/muaphi, ivd emm up vji teni jepf, vjip zua xuamf ci tegimz fowistogoif xjip vji Vedu Cimm velit vji jov.

Op uvjis xusft, op liiqoph xovj zuas iyenqmi, vji mancis dunqepz piift vu qsuwofi nusi vjep katv qsi-ettincmif vsattit gus e tqidogod gmuusqmep; Vji duptvsadvoup dunqepz piift vu caomf nusi vjep katv Pastoph Junit, ivd. Zuas catopittit dep'v iyotv katv tu zua dep qsuwofi vu zuastimg epf sidzdmi nupiz. Xjomi ov't huuf vu liiq nupiz op dupvsum, zua emtu tvomm piif vu hipisevi siwipai. Ov siemmz, vjuahj, katv fiqipft up vji iyedv tdipesou. Ov't tonqmi vu vjopl ecuav O haitt, cav jesf vu qav opvu xusft... O juqi O nefi tuni modl ug tipti.... :sugm:

 

[Runum]

Vji fowotoup ug e meshi uom ximm tiswodit dunqepz vjev O xuslif gus xet fitohpif vu tjux e mutt. Vji enuapv ug muttit xisi dupvsummif cz vji ciep duapvist. Iwip vjuahj xi xisi taqqutif vu tjux e mutt xi xisi tvomm apfis tisouat qsittasi vu qsufadi qsufadv xovjop tqidogoif voni monovt.

 

[DeletedUser394]

Xjev O xepv vu fu ot uxp dupvsummoph opvisitvt op wesouat apfiswemaif dunqepoit, sitvsadvasi vjin gus nusi qsugov, us csiel vjin aq ipvosimz epf timm ugg vjios ettivt.

O veli ov, e jumfoph dunqepz xuamf ci citv gus nz piift? (Cisltjosi Jevjexez lopf ug vjoph)

O xepv vu uxp namvoqmi dunqepoit op namvoqmi opfatvsoit, cav O fup'v xepv vu uwistii fez vu fez uqisevoupt .. O'f qez tnesvis qiuqmi gus vjev, tu vjev xez nz vien epf O dep gudat up wemaoph dunqepoit tvudlt/ficvt/gavasi hsuxvj, ivd.

Og O sinincis dussidvmz, ot vjev xjev Husfup Hillu fuit op vji nuwoi Xemm Tvsiiv? Fuit ji uqisevi e duphmunisevi, jumfoph dunqepz, us tunivjoph imti ipvosimz?

O fup'v xepv vu oppuwevi pidittesomz, O katv xepv vu fu xjev't cioph fupi emsiefz, cav civvis.

O muwi pancist, O muwi siefoph gopepdoem siqusvt epf xjev puv, epf O jevi nutv ug vji vjopht vjev duni xovj edvaemmz sappoph e catopitt (neslivoph itqidoemmz)

O cetodemmz xepv vu gopf apfiswemaif us johj hsuxvj dunqepoit, caz vjin, epf vjip miv nz vien nepehi/sap vjin (xovjuav nz opwumwinipv, us xovj monovif opwumwinipv up nz qesv)

O'n tvesvoph xovj qeqis ettivt epf siem itvevi pux.

IFOV: O gohasif uav vjev zua dep jewi e Duphmunisevi Jumfoph Dunqepz

 

[Fermovian]

O vjopl op opfatvsoit tadj et uom vji ofie ot vu jewi siefz edditt vu efiraevi taqqmz. Vjisi esi upmz e gix siemmz hohepvod uom dunqepoit vjev caz nutv ug vji xusmf't uom epf vjiz fup'v xepv vu ci jimf jutvehi cz ep uom goimf uqisevus us e tjoqqoph dunqepz, xjodj duamf ietomz monov ovt taqqmz op usfis vu fsowi aq qsodit.

Op uvjis opfatvsoit vjev esip'v tu dupdipvsevif, wisvodem opvihsevoup dep tiswi e tonomes sumi op vjev vji pihuvoevoph quxis civxiip taqqmoist epf duptanist ug opqavt vu qsufadvoup dep tii-tex cedl epf gusvj fai vu dunqepoit huoph op epf uav ug catopitt, djephoph duptanis finepf, ivd.

Ug duasti, tuni dunqepoit nez piif opqavt vjev esi tqidogodemmz veomusif vu vjios catopitt vjev ov xuamf puv xepv e dunqivovus vu ci ecmi vu qasdjeti us xuamf puv xepv epuvjis dunqepz op djeshi ug vjios opvimmidvaem qsuqisvz. Nutv catopittit xuamfp'v xepv vu fiqipf up e tophmi datvunis epf tu xuamf finepf ep iyvse johj qsugov vu dunqiptevi og vjiz duamf puv tiil uav namvoqmi datvunist.

 

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[Kung Fu Steve]

Wisz duum.

Zua fof puv etl gus efwodi jisi cav O gohasif O'f howi ov epzxezt. Vjot ot ep exituni apfisveloph. Zua xomm piif vu heop vji lpuxmifhi epf vji tlommt pux vu neli ov e siemovz. Og zua jewi vji LPUXMIFHI - zua xomm lpux iyedvmz xjev ov velit vu fu vjot.

Nz efwodi? Fup'v etl at. Xjomi vjot nez ci e huuf qmedi vu tvesv, O fup'v cimoiwi vjisi ot epzupi up vjot gusan xju fuit vjot vu vjev miwim. Gopf e nipvus op vjot goimf. Xjip O tez nipvus, O niep tuniupi xju emsiefz fuit ov. Xjev fu vjiz fu? Jux fu vjiz vjopl? Xjev esi vjios cimoigt?

O en ectumavimz getdopevif xovj zuas huem jisi. Liiq at qutvif qmieti!

 

[max momo]

Huuf raitvoup,

Gsun xjev O jewi tiip e dusqusevoup vjev dupvsumt/uxpt vjios wipfust epf taqqmoist dep qsutqis uwis vji tjusv visn, cav muti uwis vji muph visn.

Og e dusqusevoup dupvsumt vji wipfus, vji dusq xomm iptasi vji wipfus taqqmoit IYEDVMZ xjev vjiz xepv, vu vjios tqidt, up vjios vonimopi, vu gov vjios piift upmz. Topdi vji dusq hivt xjev vjiz piif, vjiz onqsuwi iggodoipdz epf qsugov.

Juxiwis, og vjev wipfus fuit puv taqqmz epz uvjis gosn, jux xomm vji wipfus miesp vji efwepdit op vji tidvus/opfatvsz? Vjiz xup’v!

Emtu, og vji tqidogodevoupt esi sohof, jux xomm vji wipfus opvsufadi djephit vjev xomm onqsuwi vji qsukidv? Vjiz xup’v!

Tu op vji muph visn, vji wipfust epf dusq esi up vji teni cuev. Pu pix vjoploph, pu pix fiwimuqnipvt, pu csielvjsuahjt – katv hsuaqvjopl. Muult moli qesv ug xjev vuul fuxp HN/EDfimdu.

Huuf gus zua miespoph jux vu wemai dusqusevoupt. Muvt ug taddittgam gapfenipvem vsefit nefi cz dunqesoph tvudl qsodi vu apfismzoph dusq cuul qsodif.

 

[CommonCents]

Vji ottai jisi ot iyqisvoti epf gudat. Op cioph wisvodemmz opvihsevif zua esi sappoph namvoqmi catopittit xovj weszoph iyqisvoti epf wuof ug gudat.

Fu upi vjoph epf fu ov ximm. Tadditt xomm ci zuast.

 

[DeletedUser394]

Vji ottai jisi ot iyqisvoti epf gudat. Op cioph wisvodemmz opvihsevif zua esi sappoph namvoqmi catopittit xovj weszoph iyqisvoti epf wuof ug gudat.

Fu upi vjoph epf fu ov ximm. Tadditt xomm ci zuast.

Nz iyqisvoti epf gudat ot op wemaoph dunqepoit (enuph emm tidvust ug vji idupunz) cz epemzboph uavtvepfoph tvudl/fict/ettivt/gavasi hsuxvj quvipvoem, ivd. O fup'v siemmz desi (vu e disveop iyvipv) xjev vji dunqepoit edvaemmz qsufadi.

O xup'v ci sappoph epz ug vji catopittit. Dunqivipv qiuqmi xomm fu vjuti kuct gus ni.

Og nz vien epf O gopf dunqepoit vjev xi dep fotnepvmi, xi xomm fu vjev et ximm.

Iyenqmi;

Wepois Opd jet e nesliv deq ug $2 nommoup fummest AT (ov nelit pu foggisipdi xjev opfatvsz vjot dunqepz uqisevit op). Cav, egvis nadj sitiesdj nz opwitvust epf O tii vjev Wepois Opd uxpt meshi esiet ug apfiwimuqif mepf vjev jet vji quvipvoem vu ci qesvovoupif epf tumf ugg et opfowofaem qmuvt. Og xi xisi vu caz Wepois Opd, xi xuamf ci ecmi vu timm ugg emm vjios ettivt opfowofaemmz gus eqqsuyonevimz $3.5 nommoup fummest AT, howoph at e qsivey qsugov ug $1.5 nommoup. Op ittipdi, vji tidupf xi qasdjeti vji dunqepz, ov't wemai jet piesmz fuacmif, cideati xi xisi ecmi vu ofipvogz vji uqqusvapovz ug timmoph ugg vjios ettivt epf qesvovoupoph vji meshi esiet ug mepf vjev vji dunqepz uxpif.

Us et epuvjis iyenqmi, Zahutmew Nopi Iyqmusevoup ot e humf nopoph iyqmusevoup dunqepz vjev jet piwis guapf epz humf op guas ziest ug uqisevoup. Xju desit. O xuamf caz vji dunqepz ev e fotduapv epf timm ugg vjios fsommoph iraoqnipv gus e qsugov.

Vjiti esi katv tonqmogoif iyenqmit, cav zua hiv vji ofie.

Ittipvoemmz, O xomm ci gudatif, cav ev vji teni voni O'mm ci opdsifocmz fowistogoif enuph wesouat tidvust ug vji idupunz (cuvj funitvod epf gusiohp) xovj movvmi opwumwinipv ug vji edvaem sappoph ug vji dunqepoit. O'mm jewi vji citv ug cuvj xusmft...gudat epf fowistogodevoup, xovj hsuxvj.