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ASSIGNMENTNO #1

WHAT IS FORWARD VERTICAL INTEGRATION

SUBMITTED TO MADAM AYESHA

SUBMITTED BY MUHAMMAD FAISAL KHAN

ROLL NO18

MBA (Executive) SECTION B

DIRECCTORATE OF DITANCE LEARNING

BZU MULTAN

8/11/2019 What is Forward Vertical Integration.docx2

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WHAT IS FORWARD VERTICAL INTEGRATION

1. Vertical integrationis 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 integrationis a strategy where a firm gains ownership or increased control

over its previous customers (distributors or retailers).

3. Backward integrationis 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 .