Vertical integration is a growth strategy where a company expands its operations by acquiring or merging with another company at a different stage in the supply chain. This helps the business control more aspects of its production process, reduce costs, secure its supply chain, and improve efficiency.
Example: If BIB purchases Wright Brothers Production Ltd, a paper and card mill that supplies the raw materials for its packaging, this would be vertical integration. This move would allow BIB to have greater control over its supply chain and reduce reliance on external suppliers.
« Back to Glossary Index