Vertical Integration and its Impact on Market Orientation

This research intends to understand the impact of vertical integrations on market orientation and will be illustrated by a case study: the acquisition of a food factory by a major player in the food industry. Research on vertical integration has mainly been focused on its measures and transaction costs issues rather than its effectiveness as a strategy. Research on market orientation has mainly been focused on the implementation of the concept. It is hence interesting to try and fill the gap in the literature by researching on market orientation and how it can be affected by vertical integration. It will give an insight on the implications on customers of integrating additional offerings (e.g. increased value), as well as the implications on performance of combining both vertical integration and market orientation. Qualitative methods are undertaken to research on the topic, with an emphasis on case study. Face-to-face and electronic interviews with a sample of managers and employees from a food industry company, which has undertaken a vertical integration, have been conducted and from which several conclusions have been drowned. Vertical integrations may contribute for a better market orientation, hence for a better experience on the level of response to the identified needs, thus enabling for better customer satisfaction. Performance is thus achieved thanks to a strong organizational culture and top management’s and employees’ behaviour and attitude. A combination of both vertical integration and market orientation also enables an increase in innovativeness, as well as new knowledge development, and new insights on consumers/customers