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.
Horizontal integration is when the company acquires one or more of its competitors.
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).
With backward vertical integration, the company acquires one or more of its suppliers or develops its own supply capability in order to gain more profit and/or control.
With forward vertical integration, the company acquires one or more of its buyers (e.g., wholesalers or retailers when the buyer is not the “ultimate buyer“)
- ^ American Marketing Association, AMA Dictionary.