Backward Integration Example: Apple M1 Chips (AAPL) One recent real-life example of backward integration isApple (AAPL), which in the past couple of years has gradually become less reliant on chip makers and manufacturers of their product components. Of course, Apple will realistically always cont...
Vertical Merger Example Shell Corporation
Backward Integration vs. Forward Integration Forward integrationis also a type of vertical integration, which involves the purchase or control of a company's distributors. An example of forward integration might be a clothing manufacturer that typically sells its clothes to retail department stores; ins...
Definition: Backward integration is a method of vertical integration that extends to the previous levels of the supply chain, aiming to protect the quality of a product or a service by gaining control over the raw materials. In other words, it’s when a company purchases a supplier in or a...
An acquisition by Tressell is a vertical merger (both are in the same production chain) with backward integration because BCC would give Tressell production facilities (i.e., BCC is ahead of Tressell in the value chain as a supplier). An acquisition by Claire’s Confections is a horizontal ...
This paper studies the welfare consequences of a vertical merger that raises rivals costs when downstream competition is 脿 la Cournot between firms with constant asymmetric marginal costs. The main result is that such a vertical merger can nevertheless improve welfare if it involves a downstream ...
The main result is that such a vertical merger can nevertheless improve welfare if it involves a downstream firm whose cost is low enough. This is because by raising the input price paid by the nonmerging firms the merger shifts production away from those relatively inefficient producers in ...