23 Explain the difference between forward and backward vertical integration.

[Sir Afzal Shad]

23 Explain the difference between forward and backward vertical integration.[3]
Hint: Backward is buying a supplier (earlier stage) > E.g., a baker buying a flour mill.
Hint: Forward is buying a customer/distributor (later stage) > E.g., a baker buying a chain of sandwich shops.

[Aarib Saad]

(KN)Forward vertical integration is when a business merges or takes over a distributor of it's products, where as backward vertical is when the business takes over or merges with it's supplier.
(APP)For instance, for a bread producer, taking over a farm will be backwards vertical, whereas taking over a grocery store will be forward vertical.
(AN)Backward Vertical will allow the business to be able to maintain consistent quality, which will help and create brand image for good quality, whereas forward vertical will give the business better reach over the market, allowing to increase it's consumer base.
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[shamaim shakeel]

KN)
Forward vertical integration means when a business joins or buys another business that is closer to the customer.
Backward vertical integration means when a business joins or buys one of its suppliers.

(APP)
For example, if a clothes factory buys a shop to sell its own clothes, that is forward integration. But if the same factory buys a cloth supplier, that is backward integration.

(AN)
Backward integration helps the business get better control over its raw materials and keep the quality the same.
It also saves money because the business does not need to buy from other suppliers.
Forward integration helps the business reach more customers, control selling prices, and build a strong brand in the market.
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[EmmanWaseem]

Forward is buying the customer
For example a Baker buying a sandwich shop
Backward is buying the supplier
For example buying a windmill as a Baker
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[Fatima ibtehaj]

[KN]Backward vertical integration is when a business takes over or merges with a supplier whereas forward vertical integration is when a business takes over or merges with a distributor or retailer.
[APP]A car manufacturer buying a tire or steel company and a car manufacturer buying a car dealership.
[AN]Thus it helps to control the supply of raw materials or components and reduce costs
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[Arham Qadri]

[KN] Forward vertical integration is when a business takes over another business in the next stage of production while backward integration is when a business takes over another business in the previous stage of production.
[APP] For instance, for a bread producer, taking over a farm will be backwards vertical, whereas taking over a grocery store will be forward vertical.
[AN] Forward vertical will allow business to increase consumer base where as backward vertical will allow business to maintain consistent quality.
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[Aayan Zaidi]

KN: Backward vertical integration is when a business joins with a supplier, while forward vertical integration is when it joins with a distributor or retailer.
APP: E.g a car maker buying a tyre company is backward integration, but buying a car showroom is forward integration.
AN: Backward helps control supply, while forward helps control how products reach customers.
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[Hajra]

K: Backward vertical integration is when a business merges with or takes over its supplier.
App: Forward vertical integration is when it merges with or takes over its distributor or retailer.
An: So, backward helps control inputs and reduce costs, while forward helps control sales and get closer to customers.
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[Abdullah Altaf]

[KN] Forward vertical integration involves a company acquiring businesses closer to the end consumer whereas backward vertical integration involves a company acquiring businesses earlier in the supply chain.
[APP] For instance, a restaurant chain acquiring a food delivery service would be an example of forward vertical integration, while a clothing retailer buying a textile mill would be an example of backward vertical integration.
[AN] Forward vertical integration can help businesses increase market share and control distribution channels, while backward vertical integration can help businesses control costs and ensure consistent quality of inputs.
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[Abdullah Mohsin]

[KN] Forward vertical integration is when a business takes over another which is futher down the supply chain, closer to the customer, whereas backward vertical integration is when a business takes over another which comes earlier in the supply chain e.g supplier.
[APP] For example, a car manufacturer takes over a steel producer, being an example of backward vertical integration, however, if the car manufacturer takes over a showroom, that would be an example of forward veritcal integration.
[AN] Backward vertical integration helps the business in decreasing its COP as it would be getting its raw material cheaper than its competitors, allowing it to reduce prices and increase sales, while forward vertical integration helps the car manufacturer understand customer complaints easily and clearly, allowing it to improve the products, improving customer satisfaction.
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[Abdullah Baig]

Kn
Backward vertical integration is when a business takes over an earlier stage of production, whereas forward vertical integration is when a business takes over a later stage of production
App
For example, a baker buying a flour mill would be backward integration as it helps control raw material supply.
A baker buying a sandwich shop would be forward integration as it allows direct access to consumers
An
Therefore, the difference lies in the direction of integration backward secures inputs and supply, while forward secures sales and distribution channels
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[Mamoona Hussain]

KN: Vertical forward integration is when a business merges or takes over another business in the same industry but at the later/next stage of production whereas vertical backward integration is when a business merges or takes over another business in the same industry but at the previous stage of production.
APP: A car manufacturer taking over a car show room/retailer is vertical forward integration whereas if he takes over a supplier like tyre manufacturer; it will be vertical backward integration.
AN: Through vertical backward integration he will be able to have more control over the raw materials and improve the quality of thier cars, which will attract more customers, improving their brand image, therefore, enabling them to charge higher prices from the customers. This will increase the revenue and profit earned. However it is difficult for through vertical forward integration as they have no such control over their suppliers.
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[Abdur Rehman khan]

[KN] Backward vertical integration is when a company acquires or merges with a supplier (earlier stage), whereas forward vertical integration is when it acquires or merges with a distributor or retailer (later stage).
[APP] For instance, a smartphone manufacturer buying a battery factory is backward integration if it acquires its own retail stores, that’s forward integration.
[AN] This means the business gains greater control over its operations backward integration helps reduce dependency on suppliers and ensures a steady supply of materials, while forward integration allows the business to manage how its products reach customers and capture more profit from sales.
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[M huzaifa jillani]

(KN)
Verticle integration happens when a business joins with another firm in the same industry but at a different stage of production. The difference depends on whether the business moves closer to the customer or closer to its suppliers.
(APP)
For example a car manufacturer buying a car showroom is forward verticle integration because it moves towards the customer. But if the same car manufacturer buys a tyre supplier, it is backward verticle integration because it moves towards the supplier.
(AN)
So the key difference is the direction of growth forward integration helps control distribution and sales while backward integration helps control supply and production materials.
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[Naveen fatima]

[KN] Backward integration is when a company merges with the company that produces its supplies (early stage) and backward is when it merges with the company that merges with its product distributor company.
[APP] For example, A car manufacturer could buy a dealership (forward) or a tyre supplier (Backward).
[AN] Forward integration helps the business control how its products are sold and increase profits from sales,Backward integration helps control the quality and cost of raw materials, improves reliability by securing steady supply of materials.
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