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Little capability overlap between different stages of the value chain (e.g. a retailer is unlikely to be an effective manufacturer, and vice versa)
Vertically integrated organisations are generally more volatile in activity and profitability than non-vertically integrated organisations because changing demand at one stage of the value chain also affects the other stages
Less concerned with cost control in their internal operations than their market-based competitors since they are internal suppliers (then hard to achieve competitive pricing and cost control)
Create organisational inflexibility, If the technology from one stage of the value chain becomes outdated, then need to think about the impact