In
microeconomics and
management,
vertical integration is an arrangement in which the
supply chain of a company is owned by that company. Usually each member of the supply chain produces a different
product or (market-specific) service, and the products combine to satisfy a common need. It is contrasted with
horizontal integration, wherein a company produces several items which are related to one-another.
Vertical integration has also described management styles that bring large portions of the supply chain not only under a common ownership, but also into one corporation (as in the 1920s when the
Ford River Rouge Complex began making much of its own steel rather than buying it from suppliers).