Vertical Integration

Vertical integration is where a company merges or takes over other companies in the same supply chain. So if Smith, the shoe manufacturer, takes over his supplier (who might be Hughes, the leather merchant), that counts as vertical integration.

Similarly, if Smith takes over Jones, which operates a chain of shoe retailing shops, that's also vertical integration.

Contrast vertical integration with horizontal integration .

Last Updated: June 2006 © Moneyextra.com

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