The Power of Thinking Vertical
I’m not referring to skyscrapers, rocket ships, or the latest trend in video formats. Wrong on all accounts; I’m talking about incorporating vertical integration into your business.
For those unfamiliar – vertical integration is a strategic approach where a company expands into multiple stages over the production and distribution processes. This can happen either by integrating backwards (suppliers), or forward (sellers) – allowing greater efficiency, reducing costs and maintaining higher quality control.
Vertical integration can protect a business from the unknown – market fluctuations, reducing dependency on third parties and streamlining operations. It can lead to increased profits and a strong competitive position in the market.
Apple's Vertical Journey
Apple is widely regarded as the most recognisable consumer brand, alongside McDonalds and Coca Cola. Their evolution over the years is a great example of moving throughout the supply chain.
Initially they started as a hardware manufacturer, designing and producing personal computers. They then realised the importance of software to enhance user experience and developed their own operating systems (iOS) which could have third-party applications built upon it.
Then Apple moved into retail – where they could completely control the customer experience and brand presentation with their own physical stores. In more recent years, they have started designing their own processors (M chips) to reduce their reliance on third-party suppliers.
By thinking vertically they have enhanced their products quality, user experiences and control over their iconic brand.
Identify Risks and Quick Wins
Unfortunately, not every business has Apple’s level of influence, but that doesn’t mean you can’t scale vertically efficiently and cost-effectively.
For the sake of speed and sanity, leverage turnkey or white-label solutions where possible. These enable rapid execution without the heavy resource commitment of building in-house. If it makes sense later, you can always develop your own infrastructure.
Thinking vertically isn’t about doing it all – it’s about understanding your entire supply chain and strategically allocating resources to what really drives value.