RESEARCH REPORT

ON

INTEGRATION
Submitted To:
PALLAVI MAM
BACHELOR OF BANKING AND INSURANCE

Session -2014-15
Submitted By:
Class:
TYBBI

INTRODUCTION:
It is a common growth strategy. Integration means combination of business that
are separate but complementary to each other. It may between firms from the
same industry or different industry that join hands to accomplish certain well
defined objectives.

FEATURES OF INTEGRATION:
(1) Integration is an association of business unit from the same or different
industries with a view to accomplish certain well defined objectives likeeliminate competition, control the market, create monopoly etc.
(2) It minimizes risks and ensures survival and growth of combining units.
(3) Integration aims at ensuring survival and growth by regulation or controlling
production and supply of goods and price.
(4) Sometimes integration can be considered as a well planned conspiracy to
create monopoly situation in the market and exploit consumers.

TYPES OF INTEGRATION:
(1)Horizontal Integration
(2)Vertical Integration

HORIZONTAL INTEGRATION:
It involves integration of business operating at the same level or acquisition of
one or more competitors.

Advantages:
Lower costs
Access to new market
Increased differentiation
Reduced competition
Increased market power

Disadvantages:
Destroyed value
Legal repercussion
Reduced flexibility

VERTICAL INTEGRATION:
The integration of business operating at different levels or stages of the same
industry is known as vertical integration.
TYPES:
(1)

Backward vertical integration:

A company exhibits backward vertical integration when it controls
subsidiaries that produce some of the inputs used in the production of its
products.

(2)

Forward vertical integration:

A company tends towards forward vertical integration when it controls
distribution centers and retailers where its products are sold. This is done
to ensure control over distribution and reduce dependence on
distributors.