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Home > QFINANCE Dictionary > Definition of vertical integration

Definition of

vertical integration

General Management

combining of operations in supply chain the practice of combining some or all of the sequential operations of the supply chain between the sourcing of raw materials and sale of the final product. Vertical integration can be pursued as a strategy through the acquisition of suppliers, wholesalers, and retailers to increase control and reliability. It can also be achieved when a company gains strong control over suppliers or distributors, usually by exercising purchasing power.

Recommended Further Reading (Term count)
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    Implementing a successful corporate-level strategy has become an urgent priority for all corporations. Parent companies must demonstrate that they are creating stockholder value by their own actions and initiatives, and not just reaping the profits of the businesses in their charge. The sanctions for being seen to fail in this challenge can be severe. At the very least, stock prices will suffer; at the other extreme, predators will force a...
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vertical integration - Related Articles

  • Acquisition Integration: How to Do It Successfully

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    But perhaps the biggest contributor to the failure of acquisitions is inadequate attention to the process of integrating the newly acquired business.
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    What’s wrong with vertical integration as a way of extending the opportunities for a stagnant business? In other words, why shouldn’t we acquire our customer to guarantee an outlet for our products?
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Definitions of ’vertical integration’ and meaning of ’vertical integration’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’vertical integration’ and other financial terms with our online QFINANCE Financial Dictionary.

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