Purpose -Strategic concentration is a key issue for manufacturing companies when designing a supply chain. As a corporate strategy and a supply chain governance strategy, vertical integration relates to organisational economics and strategic supply chain management. Numerous explanations have been created for vertical integration, and transaction cost economics (TCE) provides a theoretical basis to help understand the process. However, the current popularity of vertical integration seems inspired by something more than altering industry structure and minimising cost, which are the traditionally accepted explanations for vertical integration This paper aims to explore the driving forces for vertical integration, particularly downstream integration of distribution, and the consequences of vertical integration in a manufacturer-distributor-reseller chain. Design/methodology/approach -This study adopted an exploratory case study approach to examine a Swedish-based timber manufacturer that vertically integrated a distribution centre in the UK, which made it a direct supplier to DIY retailers and builders' merchants. Data were collected primarily through open-ended, face-to-face interviews. Findings -The study found that the most important factors driving the manufacturer's vertical integration of distribution were the demands of large retail chains and the manufacturer's decisions to focus on developing its positioning strategy in the supply chain. Vertical integration has transformed the manufacturer into a supplier to large timber products resellers, offering the firm a greater potential to provide integrated solutions and, therefore, become a strategic partner to its customers. Originality/value -This empirical study examined a building material distribution channel, a subject that has rarely been studied. Study results add empirical evidence to explanations and impacts of vertical integration, especially the integration of customer interface.

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Design/methodology/approach: The study develops a conceptual framework of nine propositions (and corresponding diagrammatic representations) of the relationships between: (i) three kinds of risk (operational, strategic, and financial); and (ii) three strategies for the provision of added service (customisation, bundling, and broadening the range of offerings).This conceptual framework is examined empirically by qualitative analysis of data gathered in a three-year longitudinal study of managerial representatives from nine multinational manufacturing firms engaged in the addition of services to their traditional goods offerings. Findings:Eight of the nine propositions are fully supported, and one receives equivocal support. In addition, several contextual factors are identified as moderating influences on the relationships between the three categories of service offering and the three classes of risk. Research implications:The study provides an original conceptual framework and nine research propositions that represent a useful starting point for the development of a formal theory of the risks of providing services. Practical implications;The conceptual framework provides guidance for managers' assessments of the risks accompanying the infusion of added services to the traditional goods offerings of manufacturing companies.Originality/value: This paper provides a novel conceptualisation of service innovation and attendant risk.

Purpose-This paper aims to investigate an underexplored aspect of outsourcing involving a mixed strategy in which parallel production is continued in-house at the same time as outsourcing occurs. Design/methodology/approach-The study applied a multiple case study approach and drew on qualitative data collected through in-depth interviews with wood product manufacturing companies. Findings-The paper posits that there should be a variety of mixed strategies between the two governance forms of "make" or "buy." In order to address how companies should consider the extent to which they outsource, the analysis was structured around two ends of a continuum: in-house dominance or outsourcing dominance. With an in-house-dominant strategy, outsourcing complements an organization's own production to optimize capacity utilization and outsource less cost-efficient production, or is used as a tool to learn how to outsource. With an outsourcing-dominant strategy, inhouse production helps maintain complementary competencies and avoids lock-in risk. Research limitations/implications-This paper takes initial steps toward an exploration of different mixed strategies. Additional research is required to understand the costs of different mixed strategies compared with insourcing and outsourcing, and to study parallel production from a supplier viewpoint. Practical implications-This paper suggests that managers should think twice before rushing to a "me too" outsourcing strategy in which in-house capacities are completely closed. It is important to take a dynamic view of outsourcing that maintains a mixed strategy as an option, particularly in situations that involve an underdeveloped supplier market and/or as a way to develop resources over the long term. Originality/ value-The concept of combining both "make" and "buy" is not new. However, little if any research has focused explicitly on exploring the variety of different types of mixed strategies that exist on the continuum between insourcing and outsourcing.

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