ASSIGNMENT

NO #1

WHAT IS FORWARD VERTICAL INTEGRATION


SUBMITTED TO MADAM AYESHA

SUBMITTED BY MUHAMMAD FAISAL KHAN

ROLL NO 18

MBA (Executive) SECTION B




DIRECCTORATE OF DITANCE LEARNING
BZU MULTAN

WHAT IS FORWARD VERTICAL INTEGRATION
1. Vertical integration is a strategy used by a company to gain control over its suppliers
or distributors in order to increase the firms power in the marketplace, reduce
transaction costs and secure supplies or distribution channels.
2. Forward integration is a strategy where a firm gains ownership or increased control
over its previous customers (distributors or retailers).
3. Backward integration is a strategy where a firm gains ownership or increased control
over its previous suppliers.
The organization becomes its own distributer and is able to control its output . Forward
vertical integration in business is when a manufacturer decides to perform distribution
OR retail functions within the distribution channel. This is commonly referred to as
eliminating the middle man, as manufacturers may cut out the wholesaler to sell directly
to retailers or the retailer to sell directly to customers.
Example
Apple is example of forward vertical integration apple has more than 287 retail store
world wide to distribute its products. mean that apple produced and distribute its
products .