XTRA: Types of Integration

Question 1

Backward vertical integration

Answer 1

This involves acquiring a business operating earlier in the supply chain – e.g. a retailer buys a wholesaler, a brewer buys a hop farm

Question 2

Conglomerate integration

Answer 2

This involves the combination of firms that are involved in unrelated business activities

Question 3

Forward vertical integration

Answer 3

This involves acquiring a business further up in the supply chain – e.g. a vehicle manufacturer buys a car parts distributor

Question 4

Horizontal integration

Answer 4

Here, businesses in the same industry and which operate at the same stage of the production process are combined.