Explain the concept of vertical integration.SolutionVertical i.pdf
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Vertical integration is when a company owns its supply chain, with each member producing a different product to satisfy a common need. It includes two types: forward integration and backward integration. A notable example is Carnegie Steel, which controlled all aspects from raw material extraction to production and transportation.
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Explain the concept of vertical integration.SolutionVertical i.pdf
- 1. Explain the concept of vertical integration. Solution Vertical integration is an arrangement or acqusition of in which the supply chain of a company is owned by that company. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need. There are two types of vertical integration namely 1. forward intergration and 2. backward integration One of the earliest, largest and most famous examples of vertical integration was the Carnegie Steel company. The company controlled not only the mills where the steel was made, but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore and the railroads that transported the coal to the factory, the coke ovens where the coal was cooked, etc. The company also focused heavily on developing talent internally from the bottom up, rather than importing it from other companies