Re: ::: vuaskari.com ::: ►►►►►Plz explane backward integration

Forward and Backward integration is Vertical and Horizontal integration respectively.

Horizontal Integration

In microeconomics and strategic management, horizontal integration is a theory of ownership and

control. It is a strategy used by a business or corporation that seeks to sell one type of product in numerous

markets. To get this market coverage, several small subsidiary companies are created. Each markets the

product to a different market segment or to a different geographical area. This is sometimes referred to as

the horizontal integration of marketing. The horizontal integration of production is where a firm has plants

in several locations producing similar products. Horizontal integration in marketing is much more common

than horizontal integration in production

Vertical integration

In microeconomics and strategic management, vertical integration is a theory describing a style of

ownership and control. Vertically integrated companies are united through a hierarchy and share a common

owner. Usually each member of the hierarchy produces a different product, and the products combine to

satisfy a common need.

Three types of Vertical Integration

There are three varieties of this: backward vertical integration, forward vertical integration, and balanced

vertical integration.

• In backward vertical integration, the company sets up subsidiaries that produce some of the

inputs used in the production of its products. For example, an automobile company may own a tire

company, a glass company, and a metal company. Control of these three subsidiaries is intended to

create a stable supply of inputs and ensure a consistent quality in their final product.

• In forward vertical integration, the company sets up subsidiaries that distribute or market

products to customers or use the products themselves. An example of this is a movie studio that

also owns a chain of theaters.

• In balanced vertical integration, the company sets up subsidiaries that both supply them with

inputs and distribute their outputs.

On Sun, May 13, 2012 at 10:29 AM, iηησcεηt ₣αiяy <im.fairy786@gmail.com> wrote:

backward integration

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