Vertical Integration
Definition
Vertical integration is when a company controls more than one stage of the supply chain for a product, from the raw materials to manufacturing and distribution.
Analogy
Imagine vertical integration like a pizza shop that grows its own tomatoes, makes its own dough, and delivers its pizzas. It controls every step of the process.
Related terms
Horizontal Integration: This is when a company acquires or merges with other companies in the same industry that provide similar products or services.
Monopoly: A situation where a single company or group owns all or nearly all of the market for a given type of product or service.
Supply Chain: The network created amongst different companies producing, handling and/or distributing a specific product.
"Vertical Integration" appears in:
Subjects (1)
Study guides (2)
Practice Questions (2)
- What is the meaning of Vertical Integration in business terms?
- If Andrew Carnegie had not successfully implemented vertical integration in his steel company, how might the growth of industrial capitalism in the U.S. have been affected?
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