The Christmas Tree of Integration

A seasonal look at the methods of growth for firms, covering organic growth and the sources of external growth.

My lesson on competition policy was enlivened by my class who had kindly drawn a festive tree on the board. After stumbling through some Competition Commission reports on monopoly behaviour we approached integration of firms and I thought the image of the tree was the perfect vehicle to develop an example.

The issue of organic growth was easy to explain with the growth of the tree. In terms of external sources of growth we proceeded to hang baubles on the tree to represent firms. We hung our first bauble in the middle of the tree and then looked for examples at the same level (horizontal), decorating as we went. Vertical integration took us forwards, up the tree, towards the consumer who was perched at the top and backwards in the supply chain, towards the roots. Leaping off the tree, enabled the idea of conglomerate growth.

You may find other ways to branch out from this idea, but I thought it was a cracking way to spruce up my lesson at the end of term!