MTH and Lionel are competitors in the market for model trains. Although Lionel once did, neither company now participates in the manufacture of the products they sell, nor does either sell through a retail channel. This indicates that the value chain for model trains has reached the point of de-integration.

Question

Quizplus · Accepted Answer

De-integration in a value chain occurs when companies within the industry move away from vertical integration, where a single company controls multiple stages of production and distribution, to a model where different stages are handled by specialized firms. The fact that neither MTH nor Lionel manufactures the products they sell, nor do they sell through a retail channel, indicates a shift towards relying on external partners for manufacturing and distribution, which is a form of de-integration.

MTH and Lionel Are Competitors in the Market for Model