Virtual or vertical? Achieving integrated global supply chains: comparison and analysis of virtual integration and vertical integration in Japanese and Korean steel industry

Abstract

Supply chain management strategies such as push strategy, pull strategy and push–pull strategy have been discussed and their advantages and disadvantages also have been empirically investigated in a number of industries in supply chain management literature. However, general assumption has been that one business entity implements supply chain strategies, even though there can be different strategies applicable for different points in supply chain timeline. This paper expands the framework of push–pull supply chain with ownership patterns. Through case studies on steel industry, we suggest that after push–pull boundary, service becomes critical competitiveness factor, and at this point, a firm can have a choice on vertical integration or not. The purpose of this paper is expanding and re–interpreting traditional supply chain strategies focusing on pull–pull boundary strategy and its ownership patterns through comparative case studies between Japanese and Korean steel processing centres.