Upward Vertical Integration

Posted in Marketing and Strategy Terms, Total Reads: 3339

Definition: Upward Vertical Integration

Vertical integration refers to the process by which a company reduces costs and increases efficiency in terms of turnaround and lead times by expanding its businesses into different points in the same production path or supply chain.

In an upward vertical integration, the organization acquires the input suppliers and is in direct control of how the products are supplied to its businesses.

For example, Reliance Industries Limited can be considered to a vertically integrated company, who own oil fields and the refineries, which supply the raw materials required for the production of their trademark polyester products.

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