Horizontal vs. Vertical Integration

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Presentation transcript:

Horizontal vs. Vertical Integration Horizontal Integration - a business takes control of other similar businesses. Example: a coffee chain buys out all other coffee business competitors. Vertical Integration - a business takes control of all aspects of the process from production through retail. Example: a coffee chain buys the fields to grow beans, buys the factories roasting and processing the beans, buys the packaging and shipment facilities, owns its own retail outlets.

Carnegie and Rockefeller Horizontal Integration: An oil refining business takes over / buys out other oil refineries (Rockefeller) Vertical Integration: Carnegie’s steel business took over every step of process from raw materials and production to wholesale and retail (bought coal mines and iron fields, steel production factories, barges and railroads for transport, etc)