Types of Business Integration

Date: 2015-10-07; view: 562.

Types of Business Integration

There are two main types of business integration (see Figure 1). Horizontal integration (a horizontal merger or acquisition) describes the joining of companies that are in the same stage of production. It is a combination of competing companies that perform the same functions. Vertical integration (a vertical merger or acquisition) refers to the combining of companies involved in different stages of production or marketing of a product or service.

Figure 1.

	VERTICAL INTEGRATION
HORIZONTAL INTEGRATION		Production Processing Distribution

Vertical integration (a vertical merger or acquisition) in its turn can be of two types: backward and forward. Integration with the supplier is backward, and integration with the customer is regarded forward (See Figure 2).

Figure 2.