Degree of Vertical Integration
Vertical integration is the amount of production and distribution chain, from suppliers of raw materials and components to the delivery of finished products/ Service to the customers that is brought under the ownership of a company .
Two types of vertical integration are:
- Forward Integration: Which that means expanding ownership of production and distribution chain forward towards the market.
- Backward Integration: Which that means expanding ownership of the production and distribution chain backward towards the sources of supply.