EOTO 2 Vertical Integration Blog #9

Vertical Integration is not a term I heard of prior to this presentation and research, so what exactly is it? 

    The dictionary definition is "the combination in one company of two or more stages of production normally operated by separate companies." Vertical Integration is when a company operates all forms of production of a product. Lets take a car company as an example. Typically they would own their dealership and sell their cars while buying steel, wires, tires, all that other stuff that a car would need and then put it together and sell it. If this company was vertically integrated with the rest of the process, they would own the steel mills, the mines where they would get their iron, the factory where they make the parts along with the dealership, the list goes on. Now, although the example I gave includes most of the process of making a car and selling it, vertical integration does not need to include everything, as stated per the dictionary definition.

Is Vertical Integration good?

       Depends on who you ask. For a company, vertical integration can be very beneficial when it is done correctly and effectively. Getting rid of the price for having to buy goods at a mark up from another company can be a very cost effective strategy, and therefor keep all good collected within the company. If done incorrectly, sometimes it can cost a company, well, their company. It gets really expensive when you have to buy out each portion of the process for your good or service, and being at a deficit after buying all these other companies can be pretty detrimental.

    But with all these other companies being owned by one company, it does end up leading to lower prices for the consumer, or at least it can, as the company does not have to spend more money on buying its resources or parts from others, so you wont have to worry as much about their prices going up as they can afford to be lower than their competitors.

So the overall answer is more yes than it is no, as the decrease in cost and increase in quality of their good due to them having direct access to the resources and more money to make sure their product is better, along with the added benefit of lower transportation costs and lower prices for the consumer.

Diffusions of Innovations of the Telegraph Blog #8

 So what is the Diffusions of Innovations theory? The short and very simplified version of it is "how popular was it over time?" The actual answer to that is "How many people used or had access to this technology from the creation or introduction of it to when it became obsolete? And how did it change over time?" Typically paired with a graph, it helps to show exactly how popular a technology or good was and how used to this technology people became, along with how many people held this item in their house/pocket. iPhone, for example, has many more people using them, and in their graph, they would still be in their popular phase and not quite dying off, unlike a Nokia or Blackberry, which has reached the end of its life when the smartphone came to be, and therefor has become obsolete.

(Example)

    So what was the Diffusions of Innovations theory like for the Telegraph?  Sadly, with the theory coming out in 1962 and the Telegraph being made in 1844 and becoming obsolete sometime in the mid 20th century, its hard to find a graph to accurately show its use. However, it became widely used sometime from 1845-1850s to send messages from place to place due to the transatlantic telegraph, but due to the price to install one into either one's home or from location to location, it never was as wide spread as the mobile phone became, so its early and late majority use was likely quite small and primarily came from News station and printers, along with military use in both world wars. There was not much use besides that, as even just sending a message was cents to the letter, and most families could not afford to send much more than a simple message.

    The early users of this tech were mainly the military and News publishers and journalists, and those who wanted to spread information from one plate to anther quickly, be it from city to city or from one country to another, so they would likely take the innovators and early adopters portion of the graph. The early majority would likely be the rich, who could afford the tax of using the telegraph with its pay per letter price. Late majority is the middle class families, who can now afford the now lowered price of sending a message from across the country, dropping from price per letter to price per word, and lastly are the laggards, the ones who used the telegraph after it has become, for the most part, obsolete. This could range anywhere from poor folk to older people who don't know how to use any of the newer tech.