Part 3/8:
One of the most prominent examples of vertical integration in action is the merger of CVS and Aetna, where CVS sought to expand its footprint in the insurance space. This trend isn't confined to healthcare; we also see other industries following suit. Companies like Walmart have leveraged vertical integration to fortify their supply chain and streamline operations effectively.
The Role of Insurance Companies
When it comes to the insurance industry, the hosts pointed to Berkshire Hathaway as a case study in vertical integration. It operates not just as an insurer but also features a notable reinsurance business. The financial safety provided through such vertical integration allows insurers to mitigate risks, particularly during catastrophic events such as hurricanes.