Examples and Case Studies of Vertical Integration

Vertical Integration
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Vertical Integration > Best Practices

ahmed zerrouki, teacher, Algeria
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  Hisham Albuolayan, Analyst, Saudi Arabia
 

Example of Vertical Integration

We need to identify the value-chain of our business, then identify the applicable vertical/horizontal integration.
An example is a company that produces and sells Polypropylene products. They need the Propylene as an input. They can buy it, but this will incur extra costs like the profit margin of the producer, transportation cost, customs (if exported), etc. Also the suppliers will have power on them.
Due to the above, it could consider to build its own production line for the Propylene to supply itself and in the same time it can sell any excessive quantities to third parties and perhaps make a little profit too.

  Luis de la Puente, CEO, Peru
 

Vertical Integration example

Another example of vertical integration for the fishing industry:
As a fish processing plant, it is a plus if you integrate the fishermen into your company as strategic partners and permanent providers (backward integration). That is the only way to assure your plant gets a stable, permanent supply of fish for production process.

 
More on Vertical Integration
Summary
Forum
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Flexible Integration Strategy
Captive Distribution
Best Practices
🥇Integration Strategy
Examples and Case Studies of Vertical Integration
🥉Symbiotic Resource Interdependencies
(Legal) Limits to Vertical Integration
Orthogonal Integration
Vertical Integration Cum Diversification
Advantages of Vertical Integration
Disadvantages of Vertical Integration
Alternatives of Vertical Integration?
Quasi Vertical Integration
Special Interest Group Leader

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