Horizontal : a business takesover/purchases another business within the same production level. e.g Woody Furnitures buying over Cheeky chairs ltd.
- both an intermediary/wholesalers
Vertical: if Woody furnitures decided to to purchase a timber yard (lumber yard). this would be known as vertical integration. because it is acquiring another business in a different stage in production.
Hey.. i just copied this outta my notes..i hope this helps
• Vertical Integration is the expansion of a business’s production in different but related areas
--> Eg. when a computer assembly company buys the silicon chip making factory
--> Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers.
--> typified by one firm engaged in different parts of production (e.g. growing raw materials, manufacturing, transporting, marketing, and/or retailing).
• Good example is the oil industry where Companies such as ExxonMobil, Royal Dutch Shell, and BP and national often adopt a vertically integrated structure.
--> active along the entire supply chain from locating crude oil deposits, drilling and extracting crude, transporting it around the world, refining it into petroleum products such as petrol/gasoline, to distributing the fuel to company-owned retail stations, for sale to consumers.
-Backward vertical integration is when businesses 'make' their components for e.g. Footlocker produces its leather and cotton thru having their own cotton fields, leather factories.
-Forward vertical integration is when businesses use facilities to deliver their finished products to the public e.g. Footlocker store.