1. Backward vertical integration example: Zara Zara is an example of backward vertical integration. The fashion brand owns a large portion of its production process and has its own manufacturing plants in Spain. With its own backward vertically integrated operation, Zara controls its quality and spe...
There are three types of vertical integration: 1. Forward integration, when the merger or investment strategy goes ‘upstream’. 2. Backward integration, when it goes ‘downstream’. 3. Balanced integration, when it moves in both directions. (Image created by Market Business News) Conglomerate in...
The backward integration strategy results in the acquirer moving further away from serving its end customers. Therefore, the purchased companies would consist of functions such as product manufacturing, development, and supplying raw ingredients. Backward Integration – Vertical Integration Strategy How Backw...
Types of Vertical Integration There are three forms this strategy takes: backward integration, forward integration, and balanced integration. Each one involves a firm branching out within its supply chain and taking control of a part of it to gain more control of manufacturing, distributing, and/...
Backward Integration Backward integration is a vertical integration that runs upstream of the supply chain. Companies expand their business operations back to the earlier stages of the supply chain. They take control of the raw material and intermediate products involved in producing the end product th...
Backward vertically integrated companies are established at the end of the supply chain, but decide to integrate at the front stage of the process. Business owners interested in becoming vertically integrated companies can study some vertical integration examples to determine the feasibility of joining ...
The other type of vertical integration is termed “backward integration.” In contrast, backward integration –as implied by the name – is when an acquirer moves upstream to gain control of functions further away from the end customer. Forward Integration→ The acquirer moves downstream, so the ...
There are several types of vertical integration. A company may expand further “upstream” in the supply chain (backward integration), further “downstream” (forward integration) or move in both directions (balanced integration). Any approach in which a company eliminates steps in the journey from...
not involved in. For example, amanufacturermay acquire a raw materials distributor to have better control over the quantity, pricing, or timing of when it gets raw goods. The company is expanding from its current position in the manufacturing process and performing a backward vertical integration....
vertical mergers involve companies operating at different stages of the production or distribution chain. They integrate either with suppliers (backward integration) or customers (forward integration) to streamline operations, gain control over the value chain, and potentially achieve cost savings and syner...