Vertical Integration
The firm owns its upstream suppliers and its Fully vertically integrated firm
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downstream buyers
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handle all of the activities from obtaining raw
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materials through delivery of the finished product.
Example: TUI AG tourism firm •
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Not a highly profitable strategy but good for business
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Backward integration (upstream)
when a company produces its own inputs
example: importing and roasting coffee beans acquiring a bakery, restaurant growing its own vegetables
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Forward integration (downstream)
when a company provides its own distribution
example: travel agent owns car rental company and
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hotels