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Strategies for vertical integration

Posted: Sat Aug 17, 2013 6:21 am
by carpii
Interested to hear in how you normally structure things with vertical integration

For example, if you are entering computing industry, its a big old chain of products from steel, silica and plastic, to electronic components and cpu to the end product.
Normally I set up a full production chain with internal sale, and only sell the end product (PC, notebook, Palm etc).

But this means any competitor sets up their own chain, and often ends up with better raw material production than I do.

1) Is it better to sell your interim products in the meantime, to remove the incentive for competitors to RnD steel, plastic etc?

2) If i change a product to disallow external sales, how long before this takes effect? It doesn't seem to cut off the supply to my competitors immediately (admittedly its a bit mean to suddenly starve them of raw materials when they don't have an alternative, but its Capitalism after all :-)

3) Finally, if you open up a restricted raw material and start selling it to competitors, how do you normally decide what price to sell it for? I tend to bump up the price, and then find that my retail products are actually costing more than the sale price (even though Its still profitable because they are all being bought from my corporation)

Re: Strategies for vertical integration

Posted: Sun Aug 18, 2013 9:43 am
by Enzo
Hi,
1) yes, I usually sell the interim product until I have more demand from my own industries for a given product.
2) it never happens, clicking internal sales will prevent new competitor to buy your product but not the existing client of your product, if you want to do so, you have either to raise the price at a level which will made IA to stop buying or create a shortfall in production by stopping sales for a while.
3) usually I sell at a price which put overall rating at 50, really dependent on competitors level.

very nice this expansion is released, I've been playing this game since capitalism I ...
cheers

Re: Strategies for vertical integration

Posted: Mon Aug 19, 2013 1:15 am
by carpii
Thanks, Ill start using your tactic.

Its quite difficult to open up an interim product for sale later, and then try to find all your consumer plants which now need to adjust their price

Re: Strategies for vertical integration

Posted: Tue Aug 27, 2013 3:14 am
by Etym
About #2 - if you destroy the sales cube in your factory/warehouse/farm/mine ... etc, you can set internal sales, buy a new sales unit in 2 or 3 days, and only you will be able to purchase the product. At least that worked in Cap II. I just started playing Lab.

Re: Strategies for vertical integration

Posted: Tue Aug 27, 2013 3:54 am
by carpii
Etym wrote:About #2 - if you destroy the sales cube in your factory/warehouse/farm/mine ... etc, you can set internal sales, buy a new sales unit in 2 or 3 days, and only you will be able to purchase the product. At least that worked in Cap II. I just started playing Lab.
Thanks, this is a good idea, but if you've only recently built the factory.

Its not always practical though.
If you've spent a lot of time and money training the sales dept to be level 9, you lose huge amounts by deleting and recreating it
The recreated sale dept just cant handle the capacity, and consequently you lose more money by your retail stores not being able to maximise demand

Re: Strategies for vertical integration

Posted: Wed Aug 28, 2013 12:06 am
by Etym
True. That's why I don't waste money training workers to make products for other companies ;)