Drivers and challenges of vertical integration in the Tanzanian construction industry

Vertical integration is originally from the manufacturing industry. It is considered as a diversification strategy adopted in the construction industry as means of solving some of the existing problems associated with construction industry such as supply chain problems, fragmented process and absence of integration to mention a few. Based on existing literature, there is paucity of studies in this area. therefore, to bridge the knowledge gap the aim of this study is to identify driving factors and challenges encountered in the application of vertical integration in the Tanzanian construction industry. A qualitative research approach was adopted through a case study method whereby a total of 15 semi-structured interviews were conducted. Data were analysed through content analysis. The findings showed that the top three driving factors were increase in competition, quality improvement and client satisfaction. Whereas, nature of contracts, high investment cost, decreased strategic flexibility and increased business risk were the most mentioned challenges. The results of this study will foster better understanding of the drivers and challenges encountered and suggest solutions to enhance the application of vertical integration in the Tanzanian construction industry.