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Home > Horizontal and vertical integration


 

Horizontal and vertical integration is a business concept created in the 19th century. Horizontal integration is the consolidation of all business in the same market. Vertical integration is the consolidation of all businesses needed to bring a product to market.

An example of vertical integration is Andrew Carnegie's steel company, when he bought out all of the businesses that were needed to produce steel, including railroads and mines.

An example of horizontal integration is Cornelius Vanderbilt's railroad business, in which Vanderbilt bought out many major railroads in 19th century America.

An example of the combination of the two is John D. Rockefeller's Standard Oil, which had bought out the all of the competing oil businesses (horizontal integration) and freight cars, warehouses, pipelines, and barrel-making factories.



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