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Topical Terminology > Vertical Integration



7 Definitions

Vertical Integration

For Vertical Integration we have terms and definitions in 7 topics. The topics are Accounting, Energy, Factory Farms, Health Care, International Economics, Supply Chain and Wood.



Vertical Integration (Accounting)

is the extent to which a firm owns its upstream suppliers and its downstream buyers. Control upstream is referred to as backward integration (towards suppliers of raw material)while control of activities downstream (towards the eventual buyer) is referred to as forward integration.


Vertical Integration (Energy)

An arrangement whereby the same company owns all the different aspects of making, selling, and delivering a product or service. In the electric industry, it refers to the historically common arrangement whereby a utility would own its own generating plants,transmission system, and distribution lines to provide all aspects of electric service.


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Vertical Integration (Factory Farms)

Economic term that is often used to describe a trend in the agriculture industry. When an agriculture corporation is vertically integrated, it is involved in more than one phase of meat production. Many of these big businesses have their own feedlots, slaughterhouses, meatpacking plants, and distributors, so they have complete control over the lives and deaths of the animals they raise.


Vertical Integration (Health Care)

Consolidation or merger of organizations that provide different types of services in a hierarchical continuum such as a hospital acquiring a nursing home and a home health agency. Also see horizontal integration.


Vertical Integration (International Economics)

Production of different stages of processing of a product within the same firm.


Vertical Integration (Supply Chain)

The degree to which a firm has decided to directly produce multiple value-adding stages, from raw material to the sale of the product to the ultimate consumer. The more steps in the sequence, the greater the vertical integration. A manufacturer that decides to begin producing parts, components, and materials that it normally purchases is said to be backward integrated. Likewise, a manufacturer that decides to take over distribution and perhaps sale to the ultimate consumer is said to be forward integrated.
Vessel: A floating structure designed for transport.
Vessel Manifest: A list of all cargoes on a vessel.


Vertical Integration (Wood)

In the forest products industry, a vertically integrated company grows its own trees, makes products from them, then makes other products from fiber leftovers from the initial manufacturing operation, then converts and adds value to all these products.


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