Vertical Integration

Definition

Vertical integration is the combination of two or more separate stages in the channel of distribution through ownership, including mergers or acquisitions (i.e., the expansion of a business by acquiring or developing businesses engaged in earlier or later stages of marketing a product).

In forward vertical integration, manufacturers might acquire or develop wholesaling and retailing activities.

In backward vertical integration, retailers might develop their own wholesaling or manufacturing capabilities.[1]

 

References

  1. ^ American Marketing Association, AMA Dictionary.

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