Vertical integration meaning in English

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Definition

vertical integration: the merging of several firms involved in a production process into one big firm noun

Pronunciation examples

UK: US Steel was one of the first companies to use vertical integration in their business practices.

US: Vertical integration describes a style of business ownership and control.

Examples

"What does interest me is vertical integration: control from production to distribution."

Exercise 1

Select the TRUE statements from the list below.

There may be more than one correct answer!

Bruno and Harold will consider Mr. Wang's offer.

Wang Industries already supplies more than 50% of the world's perfumes.

Wang wants to break up Bruno and Harold's companies and sell them for a profit.

Wang wants his company engaged in all aspects of production and distribution.

Select the TRUE statements from the list below.

There may be more than one correct answer!

Bruno and Harold will consider Mr. Wang's offer.

This statement is false. Both Bruno and Harold reject Mr. Wang's offer to buy them out. Bruno says "First of all, I'm not for sale. Secondly, I certainly wouldn't allow you to create a monopoly with my products." Harold agrees with Bruno by saying "I'm with Bruno. My stores mean too much to me to sell to you."

Wang Industries already supplies more than 50% of the world's perfumes.

This statement is false. Mr. Wang does not say that he controls more than half the world's perfume. He is saying that if he buys out Delavigne Corp and Warbuckle's International, in addition to his own factories and sales networks, he will supply over half the world's perfume.

Wang wants to break up Bruno and Harold's companies and sell them for a profit.

This statement is false. Mr. Wang does want to buy out the 2 companies, but he does not state his intention to break them up and then sell them for profit. His strategy is to have total "control from production to distribution" not to break the companies up.

Wang wants his company engaged in all aspects of production and distribution.

This is a true statement. Mr. Wang says "What does interest me is vertical integration: control from production to distribution." "Vertical integration" is the form of business organization in which all stages of production of a good, from the acquisition of raw materials to the retailing of the final product, are controlled by one company.

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