Vertical Integration

Vertical integration is when a large company owns the businesses that they get their supplies from.

John Rockefeller used vertical integration to make more money. He saved money on supplies which increased profits.

If Friendly's owned these businesses, they would be using vertical integration.

Advantages:

Higher profits due to lower costs for supplies

Supplies can be attained faster and easier

Everything is made on site

Disadvantages:

Higher costs if the company is unable to make supplies efficiently

There is no competition so the supplies may be a lower quality

The business may become a monopoly due to it's large size

Companies that are vertically integrated today:

created by- Allie, Meagan, and Sara

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