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97-549: It is vertically integrated and operates in all areas of the oil and gas industry, including exploration and production , refining , distribution and marketing , petrochemicals , power generation and trading . The business strategy also includes hydraulic fracking on the Alaska North Slope . As of 2021 Repsol had a renewable energy division. In 1927, CAMPSA (Compañía Arrendataria del Monopolio de Petróleos S.A.), headed by Miguel Primo de Rivera y Orbaneja,

194-473: A $ 5 billion proposal from Argentina to compensate for the 2012 expropriation. The proposal also would have given Repsol drilling rights to 6.4% of the massive Vaca Muerta shale-gas field. The board of Repsol unanimously rejected this offer, as it would have caused them to drop a $ 10.5 billion lawsuit that was in progress against the Argentine government. Repsol at the time owned 6.4% of YPF. On 25 February 2014,

291-400: A different product or (market-specific) service, and the products combine to satisfy a common need. It contrasts with horizontal integration , wherein a company produces several items that are related to one another. Vertical integration has also described management styles that bring large portions of the supply chain not only under a common ownership but also into one corporation (as in

388-490: A factor in determining whether vertical integration is successful. There are many problems and benefits that vertical integration brings to an economic system . Problems that can stem from vertical integration can include large capital investments needed to set up and buy factories and maintain efficient profits. Rapid technology development can increase integration difficulties and further increase costs. The requirement of different business skills venturing into new portions of

485-565: A few days previously that were kept in ice remained in perfect condition. In 1924, Clarence Birdseye patented the "Birdseye Plate Froster" and established the General Seafood Corporation. In 1929, Birdseye's company and the patent were bought by Postum Cereals and Goldman Sachs Trading Corporation . It was later known as General Foods . They kept the Birdseye name, which was split into two words (Birds eye) for use as

582-536: A humorous slogan for the town is "All that far and still no bar." The town serves as a start/end or turn-around point of several motorcycle-riding challenges offered by the Iron Butt Association . One of these, the Ultimate Coast to Coast, gives riders 30 days to travel between Deadhorse and Key West (the southernmost city in the contiguous United States) in either direction. Like all of

679-403: A large share of farm receipts, formerly assumed to go to the operator's family". Under production contracts, growers raise animals owned by integrators. Farm contracts contain detailed conditions for growers, who are paid based on how efficiently they use feed, provided by the integrator, to raise the animals. The contract dictates how to construct the facilities, how to feed, house, and medicate

776-452: A major retailer, and Essendant , a dominant wholesaler. Before a wave of deregulation at the end of 20th century, most electric utilities were vertically integrated and provided electric generation , transmission , distribution , and sales. These were not just conglomerates with a common accounting department: there was just one profit center in sales, and costs of transmission and distribution were not separated. Partial deregulation in

873-545: A monumental moment in Spanish exploration on the Iberian Peninsula. The year 1947, marked the end of a 20-year contract between the Spanish state and CAMPSA, decentralizing services while at the same time giving specific rights to the state to intervene in the company's affairs, minus distribution and commercialization, which remained exclusive to CAMPSA. In 1948, REPESA (Refinería de Petróleos de Escombreras S.A.)

970-473: A portion of the syndication revenues in order for a show to gain a spot on the schedule if it was produced by a studio without common ownership. In response, the studios fundamentally changed the way they made movies and did business. Lacking the financial resources and contract talent they once controlled, the studios now relied on independent producers supplying some portion of the budget in exchange for distribution rights. Certain media conglomerates may, in

1067-809: A similar manner, own television broadcasters (either over-the-air or on cable), production companies that produce content for their networks, and also own the services that distribute their content to viewers (such as television and internet service providers). AT&T , Bell Canada , Comcast , Sky plc , and Rogers Communications are vertically integrated in such a manner—operating media subsidiaries (such as WarnerMedia , Bell Media , NBCUniversal , and Rogers Media ), and provide " triple play " services of television, internet, and phone service in some markets (such as Bell Satellite TV / Bell Internet , Rogers Cable , Xfinity , and Sky's satellite TV and internet services). Additionally, Bell and Rogers own wireless providers, Bell Mobility and Rogers Wireless , while Comcast

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1164-497: A slower information processing rate, with the side effect of making the company so slow that it could not react quickly. Birds Eye did not take advantage of the growth of supermarkets until ten years after the competition did. The already-developed infrastructure did not allow Birdseye to quickly react to market changes. In order to increase profits and gain more market share, Alibaba , a China-based company, has implemented vertical integration deepening its company holdings to more than

1261-505: A supply chain. Operational routines also become more consistent and certain as the management of these firms gradually merge. Vertically integrated firms rarely need to worry about the sufficiency in their supply of materials because they generally control the facilities that provide them. A vertically integrated company also creates high barriers of entry into their respective economy, eliminating most potential competition. Implementing vertical integration can be beneficial in that it reduces

1358-451: A system in which mass production was most efficient. The model called for the manufacture of additional devices, all of which had carefully-curated designs by Ford engineers. Instead of passing these instructions and duties off to external manufacture firms, vertical integration was exercised within the corporation. This allowed for manageable division of labor, decreased costs in delay and exchange of goods, and organized updates of each firm in

1455-416: A trademark. Birdseye was paid $ 20 million for the patents and $ 2 million for the assets. Birds Eye was one of the pioneers in the frozen food industry. During these times, there was not a well-developed infrastructure to produce and sell frozen foods. Hence Birds Eye developed its own system by using vertical integration. Members of the supply chain, such as farmers and small food retailers, could not afford

1552-618: A transaction worth about $ 15.1 billion Cdn ($ 13 billion US). In 1971, the Repsol logo first appeared, as REPESA (Refinería de Petróleos de Escombreras S.A.) brand product, in the Motorcycling World Championship of that year. Its name derives from the founding company REPESA for its visibility and easy pronunciation in different languages. In 1991, the Instituto Nacional de Hidrocarburos (INH), before

1649-562: A two-day journey with an overnight stop in Coldfoot . During the summer months, visitors can arrange for tours to the Arctic Ocean via a guided tour only. There is no longer any public Arctic Ocean access from Deadhorse. All tours must be booked 24 hours in advance to allow time for background checks on all passengers going through the oilfield check point. Tourists can also experience the midnight sun due to Deadhorse's location above

1746-468: A vertically integrated strategy has helped Apple become a leading platform company; integrating their software (through APIs for third-party application developers) with their own hardware, across all the devices and services they offer. Vertical integration allows Apple to control production from beginning to end. Other companies may follow the Apple model, but may not see success for some time, both due to

1843-533: Is a form of vertical integration when purchasing departments take over the former role of wholesalers to source products. For vertical integration to succeed, managers must be able to adapt their managerial approach to compliment the changes in functional activities that their vertical shift accompanies. Managers should make sure that their firm can take advantage of existing functional knowledge through organisation, and simultaneously allow new functional knowledge to develop. However, environmental possibilities can be

1940-404: Is a high level of integration between basic and derivatives, as well as with refining activities in the case of the Spanish facilities. Repsol also has a number of subsidiary and affiliate companies through which the company produces polyolefin compounds, chemical specialties, and synthetic rubber at special plants. The main function of Trading is to optimize the supply and deliver to market of

2037-484: Is a major player in the generation of electricity in Spain. As of 31 December 2021, the total installed capacity in operation of low-carbon and renewables reaches 3,738 MW. This includes 693 MW in hydroelectric and pumping plants, 1,625 MW in combined cycle plants , 600 MW in cogeneration plants , 430 MW in wind and 390 MW in solar photovoltaic. In May 2012, the Argentine president Cristina Fernández de Kirchner , proposed

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2134-458: Is a more efficient business with lower costs and more profits. On the undesirable side, when vertical expansion leads toward monopolistic control of a product or service then regulative action may be required to rectify anti-competitive behavior. Related to vertical expansion is lateral expansion , which is the growth of a business enterprise through the acquisition of similar firms, in the hope of achieving economies of scale . Vertical expansion

2231-432: Is also known as a vertical acquisition. Vertical expansion or acquisitions can also be used to increase sales and to gain market power. The acquisition of DirecTV by News Corporation is an example of forwarding vertical expansion or acquisition. DirecTV is a satellite TV company through which News Corporation can distribute more of its media content: news, movies, and television shows. The acquisition of NBC by Comcast

2328-449: Is an example of an industry in which without vertical integration, would not be able to develop efficiently. In order to implement a telecommunications system that connected cities across a nation reliably, vertical integration was called upon. This strategic move ensured that the wiring, manufacture, and management of the system was consistent and functional across a state. Apple has used the vertical integration strategy for 35 years and

2425-839: Is an example of backward vertical integration. For example, in the United States, protecting the public from communications monopolies that can be built in this way is one of the missions of the Federal Communications Commission . Scholars' findings suggest that a reduction in inefficiencies caused by the market vertical value chains, including downstream prices or double mark-up, can be negated with vertical integration. Application in more complex environments can help firms overcome market failures (markets with high transaction costs or assets specificities) Scholars also identified potential risks and boundaries which may occur under vertical integration. This includes

2522-473: Is one method of avoiding the hold-up problem . A monopoly produced through vertical integration is called a vertical monopoly : vertical in a supply chain measures a firm's distance from the final consumers; for example, a firm that sells directly to the consumers has a vertical position of 0, a firm that supplies to this firm has a vertical position of 1, and so on. Vertical integration is often closely associated with vertical expansion which, in economics ,

2619-554: Is one of the leading retail distributions of LPG, bottled and bulk, worldwide and is the first in Spain and Latin America. The Chemicals division produces and markets a wide variety of products in over 90 countries, and it is one of the leaders of the market on the Iberian Peninsula. Its activities range from basic petrochemicals to derivatives. Production is concentrated at three petrochemical complexes located in Spain ( Puertollano and Tarragona ) and Portugal ( Sines ), where there

2716-587: Is one of the most successful companies in the technology industry. Apple centered its business strategy on its own development of integrated hardware, software, and latterly services. They design most of their products in-house, and do not allow their hardware and operating system to be licensed out, which allows the company to apply its company vision to its products. Large companies such as Apple are more likely than smaller companies to employ vertical integration, as they have more resources to manage each stage of production (e.g. major expansion and funding). Implementing

2813-402: Is partnered with Verizon Wireless for an Xfinity-branded MVNO . Similarly, Sony has media holdings through its Sony Pictures division, including film and television content, as well as television channels, but is also a manufacturer of consumer electronics that can be used to play content from itself and others, including televisions, phones, and PlayStation video game consoles. AT&T

2910-407: Is present in several countries, such as Spain, United States , Canada, Brazil, Bolivia, Colombia , Peru , Venezuela, Trinidad and Tobago, Norway , United Kingdom , Algeria , Libya, Indonesia and others. The oil and gas exploration and production activity is Repsol's main growth driver. Repsol has become a world leader in exploration, with over 40 finds since 2008. To guarantee this activity in

3007-402: Is removed and a corporation has the power to control all firms in its supply chain. One benefit is that the implementation of vertical integration can yield increased profit margins or eliminate the leverage that other firms or buyers may have over the firm. It allows improved coordination between production and distribution firms and decreases the cost of exchange of goods between firms within

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3104-481: Is the first ever vertical integration where a mobile phone company and a film studio company are under same umbrella. Vertical integration through production and marketing contracts have also become the dominant model for livestock production. Currently, 90% of poultry, 69% of hogs, and 29% of cattle are contractually produced through vertical integration. The USDA supports vertical integration because it has increased food productivity. However, "... contractors receive

3201-491: Is the growth of a business enterprise through the acquisition of companies that produce the intermediate goods needed by the business or help market and distribute its product. A firm may desire such expansion to secure the supplies needed by the firm to produce its product and the market needed to sell the product. Such expansion can become undesirable from a system-wide perspective when it becomes anti-competitive and impede free competition in an open marketplace. The result

3298-624: Is very light, averaging only 5.70 in (144.8 mm), including only 23.73 in (60.3 cm) of snow – less snowfall than even the warmest places in the Alaska Panhandle like Ketchikan . The mean annual temperature is 14 °F (−10 °C), with maximum temperatures reliably remaining below freezing from early/mid October to late April. As the area is located in USDA Plant Hardiness Zone 2, temperatures below −40 °F (−40 °C) can be expected during

3395-663: The Alaska North Slope by drilling a discovery well into the Nanushuk Formation , a well they called Qugruk 3. In May 2024 Repsol and Santos Limited subsidiary Oil Search were looking to sell 20-25% of their non-operating interest in the Pikka unit, to raise funds, one month after they had asked the Alaska Oil and Gas Conservation Commission for a permit to hydraulic fracking . In December 2014, Repsol announced that it would buy Canadian oil company Talisman Energy in

3492-541: The Alaskan pipeline . Prior to 1977, oil seeps (small pores or fissure networks through which liquid petroleum emerges at the surface of the land) on the Arctic coastal plain had caught the attention of the U.S. petroleum interests. The U.S. Navy drilled for oil between 1944 and 1953 with little success. In 1967, after several attempts at drilling for oil, oil company mergers, and competitive bidding for state lease sales,

3589-725: The Ancón Reserved Zone, home to hundreds of endemic marine species. The spill has been called by the Peruvian Foreign Ministry "the worst ecological disaster that has happened in Lima". The Peruvian Minister for the Environment has estimated that the penalties imposed on Repsol could go as high as USD 33.4 million, aside from the reparations to the local population. Before the Government inspected

3686-535: The Arctic Circle . In winter, the opposite phenomenon, polar night , occurs. The area often features large herds of caribou and over 200 bird and waterfowl species, including geese, swans, gulls and eagles. Other indigenous wildlife include Arctic foxes , Arctic ground squirrels , grizzly bears , polar bears , musk oxen , and Arctic hares . Because alcoholic beverages are not sold in Deadhorse,

3783-468: The Bell System , Apple , the U.S. entertainment studios, the U.S. meat industry, Ford Motor Company , CVS , and Amazon demonstrate vertical merging. Other examples like Alibaba and EssilorLuxottica cover vertical integration in other nations. During a hunting trip American explorer and scientist Clarence Birdseye discovered the beneficial effects of " quick-freezing ". For example, fish caught

3880-598: The Canary Islands . In January 2015, after two months of exploration about 50 kilometers off the coasts of Fuerteventura and Lanzarote , the company said in a statement it only found small deposits that were not worth drilling thus scrapping the project. In 2013, Repsol and Armstrong Energy, a privately held oil and gas exploration and production company in New Mexico, discovered the Pikka field 83km west of Deadhorse, Alaska and about 10km away from Nuiqsut on

3977-529: The Mitsubishi Ralliart factory program at the Dakar Rally until 2009. Vertical integration In microeconomics , management and international political economy , vertical integration , also referred to as vertical consolidation, is an arrangement in which the supply chain of a company is integrated and owned by that company. Usually each member of the supply chain produces

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4074-492: The Mountain West , Great Plains , and Southeast . An economic theory is a framework that defines how a particular economic system functions. Economists develop principles in which an economy adheres to, which provides insight onto the relationships between economic events, markets, companies, and the government. In economic theory, vertical integration has been studied in the literature on incomplete contracts that

4171-459: The Prudhoe Bay oil field was discovered. Sources conflict on the origin of the area's name. The most cited theory appears to be that the area takes its name from a local business prominent in the late 1960s and 1970s, the "Dead Horse Haulers" trucking company. How the trucking company got its name remains in dispute. In February 2023, a "high altitude object" about the size of a small car

4268-495: The Trans-Alaska Pipeline System (TAPS), which brings oil from Prudhoe Bay to Valdez on the south-central Alaska coast . Facilities in Deadhorse are built entirely on man-made gravel pads and usually consist of pre-fabricated modules shipped to Deadhorse via barge or air cargo. The Prudhoe Bay , Alaska, area was developed to house personnel, provide support for drilling operations, and transport oil to

4365-474: The "Little Three", Universal Studios , Columbia Pictures , and United Artists , produced and distributed feature films but did not own theaters. The issue of vertical integration (also known as common ownership) has been the main focus of policy makers because of the possibility of anti-competitive behaviors affiliated with market influence. For example, in United States v. Paramount Pictures, Inc. ,

4462-702: The 12th best of 92 oil, gas, and mining companies on indigenous rights in the Arctic. In 2021, Repsol was ranked no. 9 in the Arctic Environmental Responsibility Index (AERI) that covers 120 oil, gas, and mining companies involved in resource extraction north of the Arctic Circle. Repsol's La Pampilla refinery in Peru was involved in an estimated 6,000-barrel spill off the coast of Lima , on 15 January 2022. Over 18,000 square kilometres of coastline have been affected, including

4559-497: The 1920s when the Ford River Rouge Complex began making much of its own steel rather than buying it from suppliers). Vertical integration can be desirable because it secures supplies needed by the firm to produce its product and the market needed to sell the product, but it can become undesirable when a firm's actions become anti-competitive and impede free competition in an open marketplace. Vertical integration

4656-537: The Argentine oil and gas company YPF S.A. , which at the time was the largest oil-and-gas company in Ibero America. The acquisition better positioned Repsol as a multinational company. Repsol's acquisition of YPF also increased its capital to 288 million shares worldwide. Repsol's presence in Latin America was one of the keys to corporate growth. It was the first full year after the acquisition of YPF and

4753-470: The Government of the actual amount of spill stating that, since it happened during the night of the 15th, Repsol was unable to correctly estimate how much crude was spilled, and had to wait until the following morning to accurately analyse the situation. She also declined to say who would be responsible for the spill. The spill comes as the latest development in the botched response to the 2022 Hunga Tonga–Hunga Ha'apai eruption and tsunami in Peru, where, due to

4850-488: The Group’s positions in international markets for crude oil and petroleum products (integrated supply chain ). Its activity consists of: The Company’s activity in this area focuses on optimizing the margin from the marketing and sale of regasified LNG and natural gas . The optimization of the gas and LNG portfolio has been carried out through swap operations with third parties, along with logistic optimizations and trading in

4947-516: The North Slope, Deadhorse features a cold and dry tundra climate ( Köppen ET ), as even the hottest month, July, has a daily average temperature of only 48 °F (9 °C), although Deadhorse reaches 80 °F (27 °C) on average once every four years. Deadhorse averages four days per year where temperatures reach 70 °F (21 °C) or more. Since 1968, the only years that failed to reach that mark were 1972 and 1980. Precipitation

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5044-530: The Repsol board announced it had accepted a settlement offer from the Argentine government of an issue of Argentine bonds valued at $ 5 billion. The deal concluded after three months of negotiations in Buenos Aires was subject to shareholder approval. The agreement ended two years of legal wrangling and the potential for a long drawn-out legal battle. Repsol Chairman Antonio Brufau described the "friendly" settlement as "extremely positive." In 2011 Repsol built

5141-487: The Supreme Court ordered the five vertically integrated studios to sell off their theater chains and all trade practices were prohibited ( United States v. Paramount Pictures , Inc., 1948). The prevalence of vertical integration wholly predetermined the relationships between both studios and networks and modified criteria in financing. Networks began arranging content initiated by commonly owned studios and stipulated

5238-473: The U.S. The vertical merge allowed CVS-Aetna to regulate more of the healthcare and delivery chain and gave them the ability to provide higher quality care to consumers. One of the most significant advantages to this integration is the reduction in costs for healthcare. Amazon.com has been criticized for being anti-competitive as both an owner and participant of its dominant online marketplace. In office products, Sycamore Partners owns both Staples, Inc. ,

5335-493: The US in 1978 ( PURPA ) forced the utilities to buy electricity outside if the rates were competitive; this gave rise to independent power producers . The other deviation from the vertical integration model were local distribution companies in some towns and regions. In the US 250 vertically integrated companies provided 85% of electrical generation. As of 2022, this "public utility" model was still utilized in some US states, mostly in

5432-538: The absence of any formal warnings by the Peruvian Navy 's Hydrography and Navigation Directorate, two people died. Repsol has claimed that the Navy's refusal to inform the public of the incoming waves and tsunami allowed them to continue with the unloading of crude oil, which lead to the spill. On August 23, 2022, a judge in Peru admitted a lawsuit by Peru's Consumer Protection Agency, Indecopi , against Repsol, i.e.

5529-411: The animals, and how to handle manure and dispose of carcasses. Generally, the contract also shields the integrator from liability. Jim Hightower , in his book, Eat Your Heart Out , discusses this liability role enacted by large food companies. He finds that in many cases of agricultural vertical integration, the integrator ( food company ) denies the farmer the right of entrepreneurship. This means that

5626-729: The case will be dealt with in court. The case would consist of a civil lawsuit seeking $ 3bn for environmental damage and $ 1.5bn for damages to locals, like fishermen. Repsol has been a longtime sponsor of motorsport. It partners with Honda Racing Corporation to compete in MotoGP under Repsol Honda Team since 1995, winning titles with legendary riders such as Mick Doohan , Àlex Crivillé , Valentino Rossi , Nicky Hayden , Casey Stoner , and Marc Márquez . Previously, it supported two-time world rally champion Carlos Sainz until 1997, Formula One teams Jordan Grand Prix in 1998, Arrows Grand Prix in 1999–2000 and Scuderia Toro Rosso from 2018, and

5723-491: The company to change its profile. Using cutting edge technology, the company made over 30 hydrocarbon discoveries, many of which were considered to be among the largest in the world. In 2009, Petroleum Economist magazine called it the "Best energy company of the year". Following years of opposition from environmentalist groups, Spain finally gave permission in August 2014, for the company and its partners to explore prospects off

5820-573: The consolidation of Gas Natural SDG by global integration. The company's business structure was more balanced and international. Then in December 2001, Repsol completed an asset exchange agreement with Petrobras , making it the second largest consolidated oil company in Brazil . The same year Repsol announced new discoveries in Libya , Indonesia , Spain, Venezuela , Argentina , and Bolivia , prompting

5917-399: The cost of entering the market and taking on the currently successful incumbent, but also by innovating their products to make them more appealing in the marketplace than the current incumbent. Vertical integration requires a company to focus not only on its core business, but also on several difficult areas such as sourcing materials and manufacturing partners, distribution, and finally selling

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6014-559: The development and marketing of its electricity business through Gas Natural SDG. In 2003, Repsol tripled its reserves and production of hydrocarbons in Trinidad and Tobago . North American expansion in 2008, saw Repsol open a massive regasification plant on the east coast of Canada with enough capacity to supply up to 20% of the gas demand for New York and New England . In 2008, Repsol began an intensive exploration campaign and invested in exploring in new areas, with results that enabled

6111-405: The distance that separates the suppliers and customers from the resources or information, which can then boost profits and efficiency. There are internal and external society-wide gains and losses stemming from vertical integration, which vary according to the state of technology in the industries involved, roughly corresponding to the stages of the industry lifecycle. Static technology represents

6208-464: The e-commerce platform. Alibaba has built its leadership in the market by gradually acquiring complementary companies in a variety of industries including delivery and payments. One of the earliest, largest and most famous examples of vertical integration was the Carnegie Steel company. The company controlled not only the mills where the steel was made, but also the mines where the iron ore

6305-670: The entire value chain, but do not do everything in-house (e.g. assembly of iPhones by manufacturing partner Foxconn ). From the early 1920s through the early 1950s, the American motion picture had evolved into an industry controlled by a few companies, a condition known as a "mature oligopoly ", as it was led by eight major film studios , the most powerful of which were the "Big Five" studios: MGM , Warner Brothers , 20th Century Fox , Paramount Pictures , and RKO . These studios were fully integrated, not only producing and distributing films, but also operating their own movie theaters ;

6402-496: The expropriation of 51% of Repsol's shares in YPF. The Republic of Argentina's Yacimientos Petrolíferos Fiscales Act that was passed that summer made officially possible the expropriation of Repsol's shares. Repsol went to various international bodies to pursue legal action directly after losing its shares of YPF. The expropriation was an attempt by the Argentine government to nationalize its oil and gas production. Results however show that

6499-556: The farmer can only sell under and to the integrator. These restrictions on specified growth, Hightower argues, strips the selling and producing power of the farmer. The producer is ultimately limited by the established standards of the integrator. Yet, at the same time, the integrator still keeps the responsibility connected to the farmer. Hightower sees this as ownership without reliability. Under marketing contracts, growers agree in advance to sell their animals to integrators under an agreed price system. Generally, these contracts shield

6596-493: The fuel to company-owned retail stations, for sale to consumers. Standard Oil is a famous example of both horizontal and vertical integration, combining extraction, transport, refinement, wholesale distribution, and retail sales at company-owned gas stations. Telephone companies in most of the 20th century, especially the largest (the Bell System ) were integrated, making their own telephones , telephone cables , telephone exchange equipment and other supplies. The Bell System

6693-545: The gas system. It provides marketing and sales of oil and other products at service stations and directly (Direct Sales). On December 31, 2021, Repsol had 4,689 service stations in Spain, Portugal, Mexico, and Peru. Production and sale of lubricants , bases for lubricants, bitumen , jet fuel , extender oils , sulfur, paraffins , and propellant gases . In Spain and Portugal, Repsol distributes bottled Liquefied Petroleum Gas (LPG), bulk LPG, and AutoGas. In Peru, it supplies AutoGas. Repsol provides electricity and gas in

6790-527: The height of winter. Deadhorse (including Prudhoe Bay ) is classified as an isolated town/Sub-Regional Center. It is found in EMS Region 6A in the North Slope Region. Emergency Services have limited highway, coastal, and airport access. Emergency service is provided by paid EMS service and Fairweather Deadhorse Medical Clinic. Auxiliary health care is provided by oil company medical staff and

6887-411: The high cost of equipment, so Birdseye provided it to them. Until now, Birds Eye has faded slowly because they have fixed costs associated with vertical integration, such as property, plants, and equipment that cannot be reduced significantly when production needs decrease. The Birds Eye company used vertical integration to create a larger organization structure with more levels of command. This produced

6984-451: The imminent demise of the state oil monopoly, set the goal to create a company of mixed public-private capital, which exploited state oil assets. When looking for a name a survey at street level was performed and the only two words that people recognized and associate with the world of oil were CAMPSA (badge of the former monopoly) and REPSOL; obviously, this last one was chosen to name the new company. "A short, round, sonorous and catchy name

7081-665: The incomplete contracting setup. In these extended models, vertical integration can sometimes be optimal even if only the seller has to make an investment decision. Deadhorse, Alaska Deadhorse is an unincorporated community located within the CDP of Prudhoe Bay in North Slope Borough , Alaska , United States, along the North Slope near the Arctic Ocean . The town consists mainly of facilities for

7178-473: The indigenous lands of the Peruvian Amazon display a disregard for the environment. According to an Environmental Impact Assessment , Repsol's exploration of the rainforest will involve drilling at least 21 wells. Although Repsol denies it, 20 of the 21 wells fall within the land of indigenous people, who are very vulnerable to any sort of contact with foreigners. In 2016, Repsol ranked as being among

7275-401: The integrator from liability for the grower's actions and the only negotiable item is a price. In the United States new automobiles can not be sold at dealerships owned by the same company that produced them but are protected by state franchise laws. Ford Motor Company vertically integrated due to high demand for their Model T automobile. With the development of Model T, the company required

7372-405: The long term, in 2013, Repsol incorporated 65 exploration blocks, mainly in the United States (44 blocks) and Norway (6 blocks), into its mining holdings. Production was doubled as a result of the acquisition of Talisman Energy in 2015. As of January 2022, Repsol produces an average of 572,000 barrels of oil per day, and it has proven reserves of 1.9 billion barrels. Industrial activity involves

7469-515: The move to nationalize actually hurt oil production in Argentina. Compared to the oil production in 2011, YPF's oil production in 2012 fell by 8%, according to data from Argentina's Department of Energy. Repsol had the backing of the EU and the US, and both powers condemned Argentina's move as expropriation. President Fernández claimed that the state would seize 51% of YPF. In June 2013, Repsol rejected

7566-434: The now merged company. Within healthcare systems, horizontal integration is generally much more prominent. However, in the United States, major vertical mergers have included CVS Health 's purchase of Aetna , and Cigna 's purchase of Express Scripts . The integration of CVS Health and Aetna resulted in the combination of one of the nation's largest health insurance companies with a pharmaceutical company seen all across

7663-406: The potential competitor, the enhancements to horizontal collusion, and development of barriers to entry. However, it is still debated over if vertical integration expected efficiencies can lead to competitive harm to the market. Some conclude that in many cases that the efficiencies outweigh the potential risks. Contrary to horizontal integration , which is a consolidation of many firms that handle

7760-442: The product. Another major success of Apple's, is the forward integration with their retail stores, allowing them to sell their products directly to customers (helping customers to buy and use Apple's products and services), additionally helping them to control the prices of their products, and thus to maintain high-profit margins when they do. Apple is also known as one of the world's leading "orchestrators" as they exert control over

7857-551: The retail sector (residential and businesses) with a base of more than 1.3 million customers throughout all of Spain. In 2021, Repsol secured the highest level of assurance —the A label— for the second straight year, for its environmentally friendly sourcing of electricity, according to the Comisión Nacional de los Mercados y la Competencia . Repsol is the only major retail marketer in Spain, in terms of customers supplied, that guarantees 100% renewable electricity. Repsol

7954-631: The same part of the production process, vertical integration is typified by one firm engaged in different parts of production (e.g., growing raw materials, manufacturing, transporting, marketing, and/or retailing ). Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers. The differences depend on where the firm is placed in the order of the supply chain. There are three varieties of vertical integration: backward (upstream) vertical integration, forward (downstream) vertical integration, and balanced (both upstream and downstream) vertical integration. Disintermediation

8051-506: The simplest case, where the gains and losses have been studied extensively. A vertically integrated company usually fails when transactions within the market are too risky or the contracts to support these risks are too costly to administer, such as frequent transactions and a small number of buyers and sellers. The following are several case studies of vertical integration in play. Many examples center around American industries, where major companies like General Foods, Carnegie Steel Company ,

8148-526: The spill, Repsol falsely stated that the spill involved only "seven gallons". A Repsol spokeswoman stated to the Peruvian press that Repsol wasn't responsible for the spill: "we didn't cause the ecological disaster, we were unloading crude oil since the previous day. We called the Peruvian Navy, we asked them to confirm the alert on the coasts of Peru". The spokeswoman explained the mistake in informing

8245-455: The steel processes to the next generation. Oil companies , both multinational (such as ExxonMobil , Shell , ConocoPhillips or BP ) and national (e.g., Petronas ) often adopt a vertically integrated structure, meaning that they are active along the entire supply chain from locating deposits , drilling and extracting crude oil , transporting it around the world, refining it into petroleum products such as petrol/gasoline , to distributing

8342-818: The supply and trading of crude and products, oil refining, petroleum product marketing, distribution and marketing of Liquefied Petroleum Gas (LPG), production and marketing of chemicals and the development of new energies. The Repsol Group owns and operates five refineries in Spain ( Cartagena , A Coruña , Bilbao , Puertollano and Tarragona ), and one in Peru. The combined refining capacity exceeds one million barrels per day. In addition to products derived from oil and gas, Repsol also produces aviation biofuel from waste and biomass . The brands Repsol, CAMPSA, and Petronor market their products through an extensive network of over 6,900 outlets, of which over 6,500 are service stations, distributed in Europe and Latin America. Repsol

8439-434: The supply chain can be challenging for the firm. Another problem that may stem from vertical integration is the collapse of goals among the various firms in a supply chain. With each firm operating under different systems, integration may cause initial problems in management and production. Vertical integration also proves to be dangerous when monopolistic problems arise in a capitalistic economy. When this happens, competition

8536-598: The supply chain. Vertical integration enabled Ford Motor Company to be self-regulating and self-sufficient. EssilorLuxottica , the company that merged with Essilor and Luxottica , occupies up to 30% of the global market share as well as representing billions of pairs of lenses and frames sold annually. Before the merger, Luxottica also owned 80% of the market share of companies that produce corrective and protective eyewear as well as owning many retailers, optical departments at Target and Sears , and key eye insurance groups, such as EyeMed , many of which are already part of

8633-491: The two parties will negotiate tomorrow about how to divide the returns of the investments. Since the owner is in a better bargaining position, he will have stronger incentives to invest. Hence, whether vertical integration is desirable or not depends on whose investments are more important. Hart's theory has been extended by several authors. For instance, DeMeza and Lockwood (1998) have studied different bargaining games, while Schmitz (2006) has introduced asymmetric information into

8730-589: The workers and companies that operate at the nearby Prudhoe Bay Oil Field . Deadhorse is accessible via the Dalton Highway from Fairbanks , 495 miles (797 km) south, or Deadhorse Airport . Limited accommodation is also available for tourists . The permanent population is variously listed as being between 25 and 50 residents. Temporary residents (employed by various firms with local interests) can range as high as 3,000. Companies with facilities in Deadhorse service Prudhoe Bay, nearby oil fields , and

8827-421: The world's first service station certified by BREEAM , "the leading international method for evaluating and certifying building sustainability". The construction of the station was completed under green architecture parameters, utilizing multiple recycled materials. The publication Newsweek selected Repsol as the most environmentally respectful energy company of 2012. However, recent reports of Repsol drilling in

8924-557: Was created with the objective of administering concessions in handing over the state monopoly of petroleum companies. Originally the company was arranged so that the state would have a minority stake. The Creation of CAMPSA intensified the progress of the Spanish refinery industry. In 1941, the Spanish government under Francisco Franco created the INI (National Industry Institute), in order to finance and promote Spanish industries. The INI supported CAMPSA in its exploration of Tudanca, Cantabria,

9021-504: Was developed by Oliver Hart and his coauthors. Consider a seller of an intermediate product that is used by a buyer to produce a final product. The intermediate product can only be produced with the help of specific physical assets (e.g., machines, buildings). Should the buyer own the assets (vertical integration) or should the seller own the assets (non-integration)? Suppose that today the parties have to make relationship-specific investments. Since today complete contracts cannot be written,

9118-403: Was extracted, the coal mines that supplied the coal , the ships that transported the iron ore and the railroads that transported the coal to the factory, the coke ovens where the coal was coked, etc. The company focused heavily on developing talent internally from the bottom up, rather than importing it from other companies. Later, Carnegie established an institute of higher learning to teach

9215-472: Was incorporated for the installation of a refinery in the Valley of Escombreras ( Cartagena ). REPESA became the symbol of the increasing industrial consolidation in the refining sector, as it took on the production and marketing of petrol, oils and lubricants under its own brand name.' From the beginning, REPSOL was REPESA's "star brand" of petroleum as a REPESA product brand. In 1999, Repsol bought 97.81% of

9312-583: Was searched. As many terms of the language sink their roots in Latin, here the first letters of a small company of lubricants (Repesa) were used, and the term is completed with the star that identifies Spain in the cultures of the north. Repsol is one of the few names of companies that do not obey an acronym or joins that obsession of putting together letters of horrific names. And that was the first hit". Exploration and production of oil and natural gas are in charge of Repsol Exploration SA and its many subsidiaries. It

9409-556: Was shot down near the area after a decision by President Joe Biden . Deadhorse first appeared on the 1970 U.S. Census as an unincorporated village. It was made a census-designated place (CDP) in 1980. It appeared last on the 1990 census. After 2000, it was merged into the Prudhoe Bay CDP. Tourists traveling to Deadhorse and Prudhoe Bay typically take tour buses from Fairbanks via the James Dalton Highway ,

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