Vertical integration

The Economic Times  Apr 24  Comment 
Maybe you've heard the term vertical integration before. It's being thrown around a lot, especially in a time when companies are looking for competitive adva...
Motley Fool  Apr 11  Comment 
There are pros and cons to a bank adding new businesses to its operations.
Motley Fool  Apr 11  Comment 
Motley Fool  Apr 10  Comment 
It’s a low interest-rate world, but it probably won’t be for long, which means it’s high time for vertical integration.
Automotive World  May 9  Comment 
BY ALAN BUNTING. Truck OEM sourcing strategies and M&A activity create ongoing uncertainty for independent HD engine suppliers The post COMMENT: Has heavy-duty vertical integration ‘run its course’? appeared first on Automotive World.
Automotive World  Jan 9  Comment 
Waymo wants to specialise in both the self-driving software side of things and the self-driving hardware, writes Megan Lampinen The post Waymo wows with cost reductions as vertical integration pays off appeared first on Automotive World.
Financial Times  Oct 23  Comment 
It is unclear what a combination between the telecoms group and Time Warner will look like


This article defines the term vertical integration.

In microeconomics and strategic management, the term vertical integration is a type of related diversification that describes a style of nearly total ownership and control. The degree to which a firm owns its upstream suppliers and its downstream buyers determines how vertically integrated it is. Note, however, that there is no ratio or quantifiable measure to denote this.

Vertically integrated companies are united through a hierarchy and share a common owner. Usually each member of the hierarchy produces a different product or service, and the products are combined to satisfy a common need. It is contrasted with horizontal integration, in which one part of the production process is expanded across several different market segments. A common successful horizontal integration example is how Intel (INTC) has dominated the computer processor market, supplying such chips to several different manufacturers, such as Dell (DELL) , Toshiba (TOSBF) , and the Hewlett-Packard Company (HPQ) .

Vertical integration is one method of avoiding the hold-up problem. A monopoly produced through vertical integration is called a vertical monopoly, although it might be more appropriate to speak of this as some form of cartel.

==Types of Vertical Integration==There Is No Such Thing.


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