ABSTRACT
‘That component is too critical for us to out-source it. We simply must do it ourselves’ This very common statement describes what vertical integration is all about: the ownership, within the same company, of separate activities within the business system. For example, a paper manufacturer becomes ‘Integrated’ when it buys a timber farm to obtain its basic raw material direct. Another example could be IBM, which, as we saw, manufactures many of the components that go into its computers, which it assembles and distributes through different channels.
