Monday, November 30, 2009

Why are so many companies buying suppliers or distributors?

From Wall St. Journal:

Posted by at 6:03 PM
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3 comments:

  1. Quite a bit of distribution purchased by major manufacturers in the copier/printer industry recently.

    2006, three dominate manufacturers (Ricoh/Canon/Xerox) sold through a combination of company-owned branches, independent dealers, and national independent chains IKON, Danka and Global.

    2007, Xerox purchased Global. Ricoh/Canon lost approximately $1B distribution as Xerox stopped selling their products.
    2008, Konica-Minolta (a second tier manufacturer) purchased Danka. Canon lost roughly $400M distribution.
    2008, Ricoh purchased IKON. Canon lost roughly $400M distribution.

    There are no more national independents.

    FYI.

    Sam Shallenberger @TheMacCFO

    ReplyDelete

  2. Does anyone need to be reminded that Delphi used to be a part of GM, and was spun off in order to control GM's costs?

    What are the likely effects of reintegrating Delphi into GM on GM's costs? Any thoughts?

    ReplyDelete

  3. Several possible explanations:
    - transaction costs (particularly emanating from uncertainty regarding supply and prices)
    - concerns about buildups of valuable capabilities outside the firm's value chain
    - cheap acquisition opportunities (i.e. distressed assets)

    See more here:
    http://internationalbs.wordpress.com/2009/12/07/is-vertical-integration-sexy-again/

    ReplyDelete

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