Unit 5 - Vertical Integration for SMEs

Learning Objective

In this unit you will become aware of characteristics of vertical integration, and learn when this strategy can be adopted in order to make your organisation more successful. After reading the unit you will be aware of the different types of vertical integration and get to know the advantages and disadvantages, the motives and the drawbacks of vertical integration. You will also learn about alternatives of vertical integration, successfully applied in SMEs.

Estimated Time

It will take about 45 minutes to go through this unit. The application of the exercises will require additional time.

Introduction

In this unit, Vertical Integration - which is one of the strategies included in Porter´s Value Chain and already introduced previously in this handbook, will be presented in detail. We will describe the characteristics of vertical integration, positive and negative aspects, and alternatives to this in SMEs.