Definition
Integration refers to the acquisition or development of businesses that are related to the company’s current businesses as a means of increasing sales and/or profit and gaining greater control.
There are three forms of integration:
- backward integration—in which the company acquires one or more of its suppliers or develops its own supply capability in order to gain more profit and/or control
- forward integration—in which the company acquires one or more of its buyers (e.g., wholesalers or retailers when the buyer is not the “ultimate buyer“)
- horizontal integration—in which the company acquires one or more of its competitors.[1]
References
- ^ American Marketing Association, AMA Dictionary.