The Firms that use taper integration also use backward vertical integration when they rely on outside-market firms for some of their supplies.
What is meant by vertical integration?
- An structure in which a corporation's supply chain is integrated and owned by that company is referred to as vertical integration in the fields of microeconomics, management, and international political economy.
- The business structure known as vertical integration involves a company controlling various supply chain stages.
- To have more control over the production process, the business tries to bring processes in-house rather than relying on outside vendors.
- For businesses like Amazon, Apple, Ferrero, Tesla, and NVidia, vertical integration has been a key component of their strategies ever since 2021.
- We explain why major corporations are altering their strategy in this post. By integrating vertically, businesses can do away with high markups and other expenses related to brokers or wholesalers.
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