Vertical Integration is when a company expands its business into areas that are at different points on the same production path, such as when a manufacturer owns its supplier and/or distributor. Vertical integration can help companies reduce costs and improve efficiency by decreasing transportation expenses and reducing turnaround time, among other advantages. However, sometimes it is more effective for a company to rely on the expertise and economies of scale of other vendors rather than be vertically integrated.
Vertical integration is the expansion of a firm into different steps along its production path or supply chain. A vertically integrated produce company, for example, might hold a farm, a produce distribution business and a green grocery.
Horizontal integration is the process of a company increasing production of goods or services at the same part of the supply chain. A company may do this via internal expansion, acquisition or merger. The process can lead to monopoly if a company captures the vast majority of the market for that good or service.
Agribusiness is synonymous with corporate farming. It combines the words agriculture and business and it involves a range of activities and methods used involving modern food production. This involves farming, seed supply, agrichemicals, farm machinery, wholesale and distribution of products, processing, marketing, and retail sales. They do not necessarily take into consideration environmental and social best practices when doing business. Their ultimate result for their bottom line is profit.