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Essay / AT&T Case Study: Vertical Integration? - 522
AT&T, founded in 1983, was one of the pioneering multinational telecommunications companies with a diverse customer base. The company ventured into vertical integration in order to reap the benefits of expansion and expanded its product offerings by manufacturing telephones, launching satellites, designing switchable equipment and providing a range of numerous services to its customers. However, the integration led to a multitude of problems leading to ultimate failure. Vertical integration is basically described as a process that allows the company to gain competitive advantage through differentiation. However, the process, despite its countless benefits, is flawed because it sometimes creates unfair competition. In order to defend the interests of competition, the government has put in place antitrust laws. According to antitrust laws put in place by the government, unfair competition and setting higher prices without taking into account the purchasing power of suppliers are condemned. . Antitrust laws discourage monopolistic competition which eliminates...