Backward Integration
Barron's Finance & Investment Dictionary:
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Backward Integration
acquisition by a business of its own suppliers.
| Backup Withholding, Backup Line | |
| Backwardation, Bad Debt |
Barron's Marketing Dictionary:
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backward integration
Strategy employed to expand profits and gain greater control over production of a product whereby a company will purchase or build a business that will increase its own supply capability or lessen its cost of production. For example, a clothing manufacturer may purchase one of its suppliers of fabrics to lessen the cost of raw materials and have more control over the delivery schedules of the finished product. See also forward integration; horizontal integration.
Investopedia Financial Dictionary:
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Backward Integration
A form of vertical integration that involves the purchase of suppliers in order to reduce dependency.
Investopedia Says:
A good example would be if a bakery business bought a wheat farm in order to reduce the risk associated with the dependency on flour.
Related Links:
Learn what corporate restructuring is, why companies do it and why it sometimes doesn't work. The Basics Of Mergers And Acquisitions
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Barron's Finance & Investment Dictionary
Dictionary of Finance and Investment Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
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Barron's Marketing Dictionary
Dictionary of Marketing Terms. Copyright © 2000 by Barron's Educational Series, Inc. All rights reserved.
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Mentioned in
forward integration
(in marketing)
Integration, Backward
(business term)
Backward Vertical Integration
(business term)
» More