How may the differences between backward integration and forward integration be shown via examples?
How may the differences between backward integration and forward integration be shown via examples?
Database System Concepts
7th Edition
ISBN:9780078022159
Author:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan
Publisher:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan
Chapter1: Introduction
Section: Chapter Questions
Problem 1PE
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How may the differences between backward integration and forward integration be shown via examples?
Expert Solution
Step 1: Explanation
- When a corporation integrates forward, it takes control of the value chain's earlier business activities. The company takes control of the business operations that were further down the value chain through backward integration.
- Forward integration involves the corporation buying or joining forces with a distributor. Backward integration involves a corporation acquiring or merging with a manufacturer or supplier.
- Forward integration gives the business control over the supply chain. The business obtains control over the supply chain through backward integration.
- Increasing market share is the major goal of forward integration. Realizing economies of scale is backward integration's primary goal.
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