Backward Integration is the process whereby a firm purchases or creates production facilities needed to produce its goods, such as an automobile manufacturer that buys a steel mill.
Forward integration is a type of vertical integration strategy employed by companies to gain control over the direct distribution or supply chain of their products.
Forward Integration is a business strategy that involves a company expanding its operations to include control over its direct distribution or supply chain. This often means moving closer to the consumer by acquiring or establishing its retail outlets.
Rationalization refers to reorganization efforts within a firm, group, or industry aimed at increasing efficiency and profitability. Activities under rationalization may include closing redundant units, expanding others, or restructuring the product range to adapt to market demands.
Vertical integration refers to a strategy where a firm takes control over several production or distribution steps involved in the creation of its product or service. This can include owning the suppliers of raw materials, the manufacturing process, and the distribution channels.
Vertical integration involves the combination of companies operating at different stages within the same industry's supply chain. It strengthens control over production, distribution, and other critical steps, often resulting in increased efficiency and cost savings.
A vertical merger is a business combination in which members of a vertical channel of distribution merge, eliminating the middleman, potentially lowering costs, and possibly making a company more competitive if the savings are passed on to the consumer.
