This is an example of a common failing among manufacturer, whose managers are highly sensitive to difference in what they manufacture. Consequently, manufacturers tend to generate too many product variations in the belief that end customers are sensitive to fine distinctions. Independent downstream channel members correct the error by representing only the variations they judge the buyer will appreciate. In this case, Manoukian vertically integrated to ensure its stores would carry the full line (and no other brand). The result is a failure on a large scale. This failure is a result of inadvertently giving up the expertise power of the independent retailer when Manoukian vertically integrated forward into retailing. The Manoukian example shows that vertical integration can fail not only because the vertical integrator misestimates the costs of replicating key channel flows performed by retailers but also because the vertical integrator fails to recognize the unique sources of power that its independent channel partners possess, and which are lost with vertical integration if the integrator does not explicitly seek to replicate them.