Vertical integration

Vertical integration

Upstream

Downstream

Oil

Refining

Additives

Gas

Stations

Car Owner

Raw Materials

Manufacture

Assembly

Distribution

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Notes:

Vertical Integration means a company produces its own inputs or disposes of its own outputs.

At each stage in the chain value is added. A company that decides to vertically integrate makes a decision about which parts of the value added chain it wants to compete in

Vertically Integrated companies

IBM

Oil Companies

Beer Companies

McDonalds in Russia

Awl-Mart

TAPER INTEGRATION VS FULL INTEGRATION