Vertical growth is a logical strategy for a corporation or business unit with a strong competitive
position in a highly attractive industry—especially when technology is predictable and
markets are growing.12 To keep and even improve its competitive position, a company may use
backward integration to minimize resource acquisition costs and inefficient operations as well
as forward integration to gain more control over product distribution. The firm, in effect, builds
on its distinctive competence by expanding along the industry’s value chain to gain greater
competitive advantage.