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Vertical integration

A term used with reference to the amalgamation of business organizations each of which is concerned with a different stage in the production of specific goods or services. The merger of companies involved respectively in sheep farming, spinning of wool, weaving, dyeing, clothing design and manufacture, and the operation of both wholesale and retail clothing outlets would constitute a fairly comprehensive instance of vertical integration. The merging of businesses involved at the same level in the production or distribution of a particular article or service is known as lateral or horizontal integration.

Reference: The Penguin Business Dictionary, 3rd edt.