It's true that branding gains importance as a differentiator when the product moves towards being a commodity or if its innovation has reached its peak . But I disagree that it's always the driving factor for how a company is structured.
There are some industries where the franchise model is most dominant (eg fast food chains) and some others where tight control over the value chain is the norm (eg apple). And funnily enough, one of the distinctive differentiators those luxury swiss watchmakers have, is: "We make every part ourselves. Everything is manufactured in Switzerland.". Then you have the OG multinational companies like P&G or Unilever, where branding definitely plays an important role but a lot of their brands are regional so it's yet another structure.
I really think it's mainly the specific industry and geopolitics that shape supply chains and not the branding.
> I'm speculating now, but it seems really likely if that type of distributed supply chain didn't exist, we'd see a closer coupling of design and manufacturing (at an extreme end factories designing and producing their own product).
It's an interesting question. I think it's safe to say that the main driver to outsource manufacturing was cost. But nowadays companies also benefit from things like reduced accountability. Even if we assume every part of the supply chain could be done within the US, wouldn't companies like Apple still eventually outsource the ugly parts of the supply chain to some third party within the US? Simply for the appearances.
It's true that branding gains importance as a differentiator when the product moves towards being a commodity or if its innovation has reached its peak . But I disagree that it's always the driving factor for how a company is structured.
There are some industries where the franchise model is most dominant (eg fast food chains) and some others where tight control over the value chain is the norm (eg apple). And funnily enough, one of the distinctive differentiators those luxury swiss watchmakers have, is: "We make every part ourselves. Everything is manufactured in Switzerland.". Then you have the OG multinational companies like P&G or Unilever, where branding definitely plays an important role but a lot of their brands are regional so it's yet another structure.
I really think it's mainly the specific industry and geopolitics that shape supply chains and not the branding.
> I'm speculating now, but it seems really likely if that type of distributed supply chain didn't exist, we'd see a closer coupling of design and manufacturing (at an extreme end factories designing and producing their own product).
It's an interesting question. I think it's safe to say that the main driver to outsource manufacturing was cost. But nowadays companies also benefit from things like reduced accountability. Even if we assume every part of the supply chain could be done within the US, wouldn't companies like Apple still eventually outsource the ugly parts of the supply chain to some third party within the US? Simply for the appearances.