Vertical Integration (Noun)
Meaning
Absorption into a single firm of several firms involved in all aspects of a product's manufacture from raw materials to distribution.
Classification
Nouns denoting acts or actions.
Examples
- The company's goal was to achieve vertical integration by acquiring several smaller firms that supplied raw materials, manufactured components, and distributed the final product.
- Through vertical integration, the tech giant was able to cut costs and increase efficiency by bringing all stages of its smartphone production under one roof.
- The automaker's decision to engage in vertical integration led to the acquisition of several key suppliers, allowing the company to better control its production chain.
- The trend towards vertical integration in the aerospace industry led to consolidation among manufacturers, with several major players acquiring smaller firms to expand their capabilities.
- By achieving vertical integration, the energy company was able to reduce its reliance on external suppliers and increase its overall profit margins.