What are some ways of vertical dis-integration?

Outsourcing and sub-contracting If a vertically integrated part is not adding value to the overall business, it can be offloaded. Offloaded entity may lower costs or improve quality: • External supplier may have superior capabilities. More specialized systems. More updated tech. Skill-focused employees. etc. • Supplier may have scale or experience economies Outsourcing allows the principal firm to: • “stick to its knitting” • Reduce the size of its balance sheet • Flexibly adjust to market demand