Integration

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:

  1. 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
  2. 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“)
  3. horizontal integration—in which the company acquires one or more of its competitors.[1]

 

References

  1. ^ American Marketing Association, AMA Dictionary.

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