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vertical integration
This term describes a corporate strategy focused on supply chain control. It is primarily used in business, economics, and strategic management contexts to describe a company's move to reduce dependency on external vendors or distributors. The term carries a connotation of power, efficiency, and market dominance.
There are two primary directions of this strategy: backward integration, where a company moves up the supply chain toward raw materials, and forward integration, where it moves toward the end consumer. This is often contrasted with horizontal integration, which involves acquiring competitors at the same level of production.
Meanings
Examples
The company achieved vertical integration by purchasing its own shipping fleet.
The company achieved vertical integration by purchasing its own shipping fleet.
We need to consider vertical integration to reduce our reliance on third party suppliers.
Vertical integration allows the firm to control every step of the value chain.
Maybe vertical integration is the only way to ensure consistent quality across the board.
The tech giant is pursuing a strategy of vertical integration by designing its own chips.
I wonder if vertical integration will actually lower our long term operational costs.
The oil company employs vertical integration by owning both the wells and the gas stations.
Their move toward vertical integration has effectively eliminated the middleman.
Their move toward vertical integration has effectively eliminated the middleman.