Merger of companies at different stages of production and/or distribution in the same industry.
When a company acquires its input supplier it is called backward integration. When it acquires companies in its distribution chain it is called forward integration. For example, a vertically integrated oil company may end up owning oilfields, refineries, tankers, trucks, and gas (petrol) filling stations. Also called vertical merger. See also horizontal integration.
Use 'vertical integration' in a Sentence
Steve was not content merely to make money in his business, he wanted to acquire his distributor as well, and increase his profits through vertical integration.
During a board meeting at Discover ™, most of the board members agreed that the corporation should consider vertical integration with the third parties participating in making the plastic cards.
The two companies are closely related in terms of their industry and have been competing bitterly for many years, so both sides might possibly be amenable to a vertical integration strategy that eliminate the rivalry and combine their forces.
You Also Might Like...
