The degree to which a firm has decided to directly produce multiple value-adding stages, from raw material to the sale of the product to the ultimate consumer. The more steps in the sequence, the greater the vertical integration. A manufacturer that decides to begin producing parts, components, and materials that it normally purchases is said to be backward integrated. Likewise, a manufacturer that decides to take over distribution and perhaps sale to the ultimate consumer is said to be forward integrated.
In this context, an economic term describing the U.S. pork industry. It means that a small number of companies are involved in more than one, and usually several, phases of pork production. Large factory farming companies ("integrators") combine company-owned farms, contract farms, and farming-related businesses (feed mills, transportation, etc.) under a single company banner.
The integrating of successive stages of the production and marketing functions under the ownership or control of a single management organization. For example, much of the broiler industry is highly vertically integrated in that processing companies own or control the activities from production and hatching of eggs, through the growth and feeding of the chickens, to slaughter, processing, and wholesale marketing.
is the extent to which a firm owns its upstream suppliers and its downstream buyers. Control upstream is referred to as backward integration (towards suppliers of raw material), while control of activities downstream (towards the eventual buyer) is referred to as forward integration.
a system of combining all phases of hog production under a central organization that ensures product quality and consistency. Vertical integration allows Smithfield to track animals from start to finish, making it possible to meet consumersâ€™ desire for safe, low-cost and high-quality food.
control over all aspects of a product's development, manufacturing, and distribution. In the meat industry, vertical integration refers specifically to control over both livestock production and meat processing. This allows for greater product consistency and traceability.
The acquisition by a company operating in one market of another company which is complementary to its existing business (as a supplier or user of product) but which operates in another market eg. a newspaper publishing company acquiring a paper manufacturer. (See also Horizontal Integration).
Consolidation or merger of organizations that provide different types of services in a hierarchical continuum such as a hospital acquiring a nursing home and a home health agency. Also see horizontal integration.
A firm’s acquisition of the control of the different stages of the production process, from the earliest processing of raw materials to the distribution of the final products. Français: Intégration verticale Español: Integración vertical
Two adjacent production stages are said to be vertical ly integrated when they are brought under common ownership and control. "Under vertical integration, the intermediate product is traded within the firm. If the two stages share the same production site than the integration occurs within the plant; otherwise it occurs between plants. When adjacent stages are located in different countries, vertical integration leads to international, intra-firm trade. " (M. Casson, 1986)
In the forest products industry, a vertically integrated company grows its own trees, makes products from them, then makes other products from fiber leftovers from the initial manufacturing operation, then converts and adds value to all these products.
A practice in which a single company engages in two or more of the activities of the film industry ( production, distribution, and exhibition). In the U.S. film industry, the Majors were vertically integrated from the 1920s on, owning production facilities, distribution companies, and theaters. The industry's vertical integration was judged monopolistic by the Supreme Court in the Paramount decision of 1948. In the 1980s, the practice reemerged when production and distribution companies began acquiring interests in theater chains and cable television concerns.
This occurs where a business acquires another which operates in a different but related industry. The related industry is either "upstream" or "downstream", for example, a company acquiring its suppliers or customers.
The linkage of firms in different stages of production or marketing under the ownership of a single firm (from Gail L. Cramer and Clarence W. Jensen, Agricultural Economics and Agribusiness, Sixth Edition, John Wiley and Sons, Inc., 1994).
Coordination of various levels of producing, processing, and distributing under one decision making unit, generally through direct ownership of the different stages or through contracts. A vertically integrated firm will consist of breeder flocks, hatcheries, feed milling and delivery, growout, assembly, processing plants, further processing plants, and delivery to buyers. Ancillary services, such as building and equipment supplies, fuel, and financing are often affiliated with the operation.
is the process whereby different aspects of a business, "upstream" and "downstream" -- ranging from sourcing raw materials and production to marketing -- are brought together. In the oil business a company which is primarily engaged in the production of crude petroleum may decide to engage in vertical integration by acquiring downstream refineries and distribution networks. Similarly, a company strong in its downstream operations may try to engage in vertical integration by investing more in exploration and development and acquiring a greater stake in the production process. Vertical integration may also occur when complementary companies make long term contracts with one another or joint ventures, or if they decide to merge. Vertical integration should not be confused with horizontal integration, or movements toward greater oligopoly or monopoly within an industry. However, vertical integration may encourage tendencies toward oligopoly by offering the integrated companies a competitive edge against their less integrated rivals. Source: http://menic.utexas.edu/menic/utaustin/course/oilcourse/vertical.html
where a single company is active in more than one level in the production and supply of telecommunications services, e.g. where a network operator also provides enhanced services which are carried over the network, or supplies the consumer equipment needed to access services it provides.
The combination within a firm or business enterprise of one or more stages of production or distribution. In the electric industry, it refers to the historical arrangement whereby a utility owns its own generating plants, transmission system, and distribution lines to provide all aspects of electric service.
Economic term that is often used to describe a trend in the agriculture industry. When an agriculture corporation is vertically integrated, it is involved in more than one phase of meat production. Many of these big businesses have their own feedlots, slaughterhouses, meatpacking plants, and distributors, so they have complete control over the lives and deaths of the animals they raise.
An arrangement whereby the same company owns all the different aspects of making, selling and delivering a product or service. In the electric industry, it refers to the historically common arrangement whereby a utility would own its own generating plants, transmission system and distribution lines to provide all aspects of electric service.
In the business world, vertical integration is understood as meaning the grouping of companies on differing production levels of the value-added chain under a single management. For example, in the energy industry, a single company completes sourcing/generation, transmission/network and sales.
the potential within an enterprise to incorporate all aspects of management, production, sales and distribution into their business operations. In theory, the greater the vertical integration, the less vulnerable an enterprise is to outside forces.
The term vertical integration refers to the consolidation of numerous production functions, from the extraction of the raw materials to the distribution and marketing of the finished products, under the direction of one firm.
In microeconomics and strategic management, the term vertical integration describes a style of ownership and control. 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 combine to satisfy a common need.