A business strategy where a company expands its operations by acquiring or controlling different stages of its supply chain, either upstream (suppliers) or downstream (distribution channels). Aims to increase control, reduce costs, or capture more value.
'Vertical' from Latin 'verticalis' (overhead) and 'integration' from Latin 'integrare' (to make whole). Economic concept developed in early 20th century industrial organization theory to describe supply chain control strategies.
Vertical integration is like trying to do everything yourself - it gives you control but often at the cost of flexibility and innovation. Many companies that vertically integrated in the past are now outsourcing those same functions to focus on core competencies.
Complete word intelligence in one call. Free tier — 50 lookups/day.