vertical integration

Form of business organization in which all stages of production of a good, from the acquisition of raw materials to the retailing of the final product, are controlled by one company.

A current example is the oil industry, in which a single firm commonly owns the oil wells, refines the oil, and sells gasoline at roadside stations. In horizontal integration, by contrast, a company attempts to control a single stage of production or a single industry completely, which lets it take advantage of economies of scale but results in reduced competition.

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Universalium. 2010.

Look at other dictionaries:

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  • vertical integration — noun absorption into a single firm of several firms involved in all aspects of a product s manufacture from raw materials to distribution • Syn: ↑vertical combination • Derivationally related forms: ↑vertical • Hypernyms: ↑consolidation,… …   Useful english dictionary

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  • vertical integration — noun The integrating of successive stages in the production and marketing process under the ownership or control of a single management organization. Ant: horizontal integration …   Wiktionary

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