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Pros And Cons Of Vertical Integration

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A theory on vertical integration suggests that vertical integration may have a number of efficiency improving effects that ultimately lower prices, improve product quality, and thus increase consumer welfare (Chipty, T. (2001). In the case of Netflix these would all be pros for the company. Lowering prices are good for any company and if Netlix can gain access to newer content quicker that would be improved product quality. Netflix has the potential to replace cable providers like Time Warner, Comcast, and Brighthouse. Netflix delivers directly to the consumer like a cable provider does so if they can vertically integrate with a company that provides programming content like Nickelodeon or CBS they should be able to benefit from all of the
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