Editing Vertical integration (section)

=== Birdseye ===
Birdseye has been used as a classic example of vertical integration in business school case studies. During a hunting trip American explorer and scientist [[Clarence Birdseye]] discovered the beneficial effects of "[[Flash freezing|quick-freezing]]". For example, fish caught 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 [[Post Consumer Brands|Postum Cereals]] and [[Goldman Sachs|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 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 the high cost of equipment, so Birdseye provided it to them.

Until now, Birds Eye has faded slowly{{Citation needed|date=October 2021}} 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.<ref>{{Cite web |title=Birds Eye and the U.K. Frozen Food Industry (A) - Case - Faculty & Research - Harvard Business School |url=https://www.hbs.edu/faculty/Pages/item.aspx?num=23158 |access-date=2025-05-20 |website=www.hbs.edu}}</ref> This produced 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.<ref>{{Cite journal |last1=Geroski |first1=Paul |last2=Vlassopoulos |first2=Tassos |date=1991 |title=The Rise and Fall of a Market Leader: Frozen Foods in the U.K. |url=https://www.jstor.org/stable/2486482 |journal=Strategic Management Journal |volume=12 |issue=6 |pages=467–478 |doi=10.1002/smj.4250120607 |jstor=2486482 |issn=0143-2095}}</ref>