vertical integration

Popular Terms
Merger of companies at different stages of production and/or distribution in the same industry.

When a company acquires its input supplier it is called backward integration. When it acquires companies in its distribution chain it is called forward integration. For example, a vertically integrated oil company may end up owning oilfields, refineries, tankers, trucks, and gas (petrol) filling stations. Also called vertical merger. See also horizontal integration.

Use 'vertical integration' in a Sentence

Steve was not content merely to make money in his business, he wanted to acquire his distributor as well, and increase his profits through vertical integration.
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During a board meeting at Discover ™, most of the board members agreed that the corporation should consider vertical integration with the third parties participating in making the plastic cards.
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The two companies are closely related in terms of their industry and have been competing bitterly for many years, so both sides might possibly be amenable to a vertical integration strategy that eliminate the rivalry and combine their forces.
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