Vertical Integration

Definition

Vertical integration refers to the consolidation of multiple stages of production and distribution within a single company. In other words, it is when a company controls various aspects of its supply chain, from production to distribution.

Related terms

Supply Chain: The sequence of activities involved in the production and distribution of a particular product.

Economies of Scale: The cost advantages that companies gain by increasing their scale of production.

Monopoly: A situation where a single company dominates the market by controlling all or most of the supply.