Definitions for vertical integration
This page provides all possible meanings and translations of the word vertical integration
vertical integration, vertical combination(noun)
absorption into a single firm of several firms involved in all aspects of a product's manufacture from raw materials to distribution
The integrating of successive stages in the production and marketing process under the ownership or control of a single management organization.
In microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or service, and the products combine to satisfy a common need. It is contrasted with horizontal integration. Vertical integration has also described management styles that bring large portions of the supply chain not only under a common ownership, but also into one corporation. Vertical integration is one method of avoiding the hold-up problem. A monopoly produced through vertical integration is called a vertical monopoly. Nineteenth-century steel tycoon Andrew Carnegie's example in the use of vertical integration led others to use the system to promote financial growth and efficiency in their businesses.
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