From this perspective, it is actually surprising that vertical integration is not even more common in channels than it really is. It is appealing to think that know-how from one part of the value chain could be amortized by applying it upstream or downstream. Downstream and upstream activities, however, are very different and conform to different financial models. These fundamental differences drive firms to grow and diversify into other (perhaps related) businesses but often at the same level of the value chain (e.g., production or wholesaling or logistics or retailing, but not all of them-wherever their expertise and expectations lie).