They taught us in economics that companies have to specialize and build core competencies. They need to do things really well and be the best possible in the specific domains. But today, things go a little more. For technology companies, everyone is doing everything, even at a top-level. Alphabet, Google parent company, is a car company, a search company, a medical company, an advertising juggernaut, etc. Amazon is an e-commerce firm, a publisher, a movie producer, a drone maker, and a car maker (with expected closure on Zoox acquisition).
What is happening is the efficiencies in technology firms: you have this massive fixed cost investment, and once that is done, you can keep adding things on top of it. So, unlike in the old industrial age empires, one core technology can be re-used across many sectors. Due to that possibility, most times, it does not make sense outsourcing those extra services.
The big news is that Apple will make its Mac chips, taking the business from Intel. You may wonder why do that? Technically, Apple has been making chips for the iPhone and it has done the core investments in chip making. Those investments include CAD, testing, FA/QA systems, etc. So, bringing the chip design for Mac in-house is never going to be the same as someone who is just starting a chip business.
Of course, this is not to say that Apple will start growing carrots to supply restaurants. My point is that vertical integration – “the combination in one company of two or more stages of production normally operated by separate companies”- has become easy in markets and anytime you are serving customers, there is a possibility you can be disintermediated. So, be prepared to avoid surprises in your company.---
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