backward integration

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.
References in periodicals archive ?
Through its backward integration, the company can guarantee supply security.
a move that will help the firm achieve its goal of backward integration into bottle processing for its Repreve recycled fiber product line.
Major players such as Phillips Carbon Black Limited have started incorporating backward integration to counter the fluctuation in prices of feedstock and volatility in crude oil prices.
Oxea's relentless customer-centric approach in all activities from product development to product delivery and service, coupled with its backward integration into raw material manufacturing and ensuring timely delivery of products to customers has propelled the company to the forefront of European plasticizers market.
In addition, the backward integration of supplier linkages will have tremendous economic impact on Telangana.
The investors plan to enhance the scope of investment further by investing in the mining of iron ore in Balochistan and in the production of semifinished steel products thus achieving forward integration in the next three years and backward integration in four years as it involves investment in parts of Baluchistan where law and situation is not exemplary.
Not only should businesses manage the backward integration but also address the concerns of its core business.
purchased the Arez LLC resin facility for backward integration from paste ink varnishes to rosin resin derivatives.
The maximum grant for any project is ` 10 crore and only projects with backward integration can benefit from this", he said.
We are going to do a backward integration for rice by growing the crop as well as distributing it.
As its production benefits from backward integration, BASF offers its customers high delivery reliability.
The ban on cement importation into the country from last year, is regarded as successful as it has led to the full implementation of the backward integration policy in the cement industry.

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