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What is "Vertical Integration" ?

+2 Votes
May 14th 2014 AN ACCA USER 520 Points

2 Replies

+3 Votes

Thanks, Muhammad Mahad ****,
That was a sweet, short description on vertical integration. The forward toward consumer and the backward toward supplier.
Why not talk about the negative aspects of vertical integrations?
Like when and why vertical integration is not always good?
How can it adversely affect business finance?
Adding some examples will even be better in our discussion.

May 15th 2014 AN ACCA USER 8,730 Points
+1 Vote
it means becoming your own supplier or distributor...
e.g if you are a producer ( of any good) you are receiving raw material from a supplier and after producing good you sell it to another party which deals with the final consumer...
Vertical integration in this context means that you expand backward i.e. start dealing in spare parts or raw material and supply your production with raw material and then instead of selling to any third party you expand forward i.e. build your own outlet to deal with the final consumers
May 14th 2014 AN ACCA USER 300 Points