Vertical Integration

Vertical integration means that a firm owns one or more firms at other levels in the production/distribution process. An example would be a company that makes steel kitchen utensils which also owns a steel manufacturing firm and/or a chain of kitchenware stores.

    Potential entrants might fear that they can't compete because of the possible cost and other advantages that would derive from this sort of integration.

Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved