forward integration

Forward Integration

A business model whereby a company takes direct control of how its products are distributed. For example, a company may market its products directly to consumers rather than selling them to a retailer. Alternatively, forward integration may involve the company simply acquiring the retailer. See also: Backward integration.

forward integration

see VERTICAL INTEGRATION.

forward integration

the joining together in one FIRM of two or more successive stages in a vertically related production/distribution process; for example, flour millers acquiring their own outlets for flour, such as bakeries. The main motives for forward integration by a firm are to secure the market for the firm's output and to obtain cost savings. See VERTICAL INTEGRATION, BACKWARD INTEGRATION.
References in periodicals archive ?
However, while customers might conceivably help in developing new ideas and creative designs, the tradeoffs in confidentiality and potential for infringement, such as backward or forward integration by customers and suppliers, makes the involvement of external entities in developing innovative capability fraught with risk.
After the kick off for the set up of a 860 MW gas-fired power plant at the Petrom refinery in Petrobrazi (Romania) and the planning of a gas-fired power plant in Haiming (Germany), OMV has taken a further step towards the forward integration of the gas value chain into power generation: OMV Power International, a wholly owned subsidiary of OMV Gas & Power GmbH, signed a share purchase agreement to acquire 60% of the Turkish Borasco Elektrik Uretim Sanayi ve Ticaret A.
The next phase will focus on further backward and forward integration to build a cluster of product segments.
Chapter 4 explores strategies designed to promote development in the coffee industry in the 20th century, including the International Coffee Agreement, instant coffee and forward integration, the Colombian and Costa Rican models of coffee production, and producer protection.
Safra is also planning a third phase forward integration project to utilise the BTX produced in the second phase.
However, there is greater interest in forward integration into the steel service centers.
Ashland saw the success of forward integration with coldbox, driving the casting design, as opposed to back ward integration, driving casting production.
In explaining Dow's forward integration into molding, Rogowski says it puts the company in close contact with Ford and such associated suppliers as Visteon and Faurecia.
Backward or forward integration can be a major and vital change for a company.
It is readily apparent that forward integration by providers into the insurance function is not only strategically likely but inevitable.
This classic case of forward integration will force consolidation in that level of the chain.

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