Vertical integration
Ownership or control of another stage in a business’s supply chain, such as an upstream supplier or downstream distributor. Coordinating with an independent supplier alone is not vertical integration.
Vertical integration in practice
Hypothetical: a manufacturer acquires an alloy supplier, integrating upstream. This may reduce dependence on that outside supplier, but the manufacturer now bears the supplier’s operating responsibilities and investment needs.
Terms Related to Vertical integration
Outsourcing · Value chain · Joint venture · All of the glossary