backward integration

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Backward Integration

A business model whereby a company takes direct control of how its products are supplied. For example, a company may buy another company that previously supplied its raw material. That is, a butcher may own a ranch so that he does not have to buy slaughtered animals from an outside ranch. Alternatively, backward integration may involve the butcher buying the outside ranch. See also: Forward Integration.

backward integration

see VERTICAL INTEGRATION.

backward integration

the joining together in one firm of two or more successive stages in a vertically related production/ distribution process, with a later stage (for example, bread making) being combined with an earlier stage (for example, flour milling) Backward integration is undertaken to cut costs and secure supplies of inputs. See VERTICAL INTEGRATION, FORWARD INTEGRATION.
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Maximum flexibility, high functionality, ease of integration, backward and forward compatibility are among the many module features that help to ensure an optimized and cost efficient solution that preserves a customer's technology investment.

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