vertical integration
Own your suppliers
Vertical integration is a business strategy in which a company expands by acquiring or developing operations at different stages of its supply chain, from raw materials to final distribution.
A manufacturer that buys its suppliers or opens its own retail stores is vertically integrating.
The oil company achieved vertical integration by controlling everything from drilling to gas stations.
The opposite approach, focusing on one stage while outsourcing others, is horizontal specialization.
One seller, no substitutes
- oligopolyFew firms dominate market
- dominanceSuperior influence over others
- antitrustAgainst corporate market dominance
- barriers to entryFactors blocking market access
market concentration · price control · foreclosure · regulatory scrutiny · predatory pricing · unfair advantage
Combining into unified whole
- acquisitionAct of obtaining something
- mergerCorporate combination
- conglomerateCorporation spanning many industries
- diversificationExpanding into varied areas
expansion · growth · scale · market share · penetration · competitive advantage · corporate strategy · business model
Making more aerodynamic or efficient
- optimizationMaximizing efficiency or performance
- cost-savingReducing expenditure
- economies of scaleCost advantages from size
- coordinationOrganized cooperative movement
lean · productivity · just-in-time · workflow · process improvement · throughput · standardization · transaction costs
Toward a river's origin
- downstreamAlong the current's path
- manufacturingIndustrial product creation
- procurementObtaining goods externally
- distributionAllocation across recipients
logistics · suppliers · production · inventory · warehousing · sourcing · value chain · operations
monopoly
One seller, no substitutes
- oligopolyFew firms dominate market
- dominanceSuperior influence over others
- antitrustAgainst corporate market dominance
barriers to entry · market concentration · price control · foreclosure · regulatory scrutiny · predatory pricing · unfair advantage
consolidation
Combining into unified whole
- acquisitionAct of obtaining something
- mergerCorporate combination
- conglomerateCorporation spanning many industries
diversification · expansion · growth · scale · market share · penetration · competitive advantage · corporate strategy · business model · ownership
streamlining
Making more aerodynamic or efficient
- optimizationMaximizing efficiency or performance
- cost-savingReducing expenditure
- economies of scaleCost advantages from size
coordination · lean · productivity · just-in-time · workflow · process improvement · throughput · standardization · transaction costs · quality control
upstream
Toward a river's origin
- downstreamAlong the current's path
- manufacturingIndustrial product creation
- procurementObtaining goods externally
distribution · logistics · suppliers · production · inventory · warehousing · sourcing · value chain · operations · insourcing
- agriculturefarms, crops, farm, farmers, farming
- business termsfranchising, revenue stream, board meeting, gross margin, markdown
- governancegovernance, government, democracy, vote, parliament
- industrializationfactory, industrial revolution, Industrial Revolution, factories, manufacturing
- agribusinessagribusiness, farm, farms, corporate farms, factory farming
- corporate strategymergers, acquisitions, divestitures, divestiture, synergies
vertical integrationoutsourcing
Third-party task delegation
subcontracting · externalization · disaggregation · offshoring · unbundling
vertical, integral, integrated, integration, integrating, integrates, integrative, integrator