Forward Integration

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DEFINITION of 'Forward Integration'

A business strategy that involves a form of vertical integration whereby activities are expanded to include control of the direct distribution of its products.

INVESTOPEDIA EXPLAINS 'Forward Integration'

A good example of forward integration is when a farmer sells his/her crops at the local market rather than to a distribution center.

RELATED TERMS
  1. Vertical Integration

    When a company expands its business into areas that are at different ...
  2. Backward Integration

    A form of vertical integration that involves the purchase of ...
  3. Horizontal Integration

    The acquisition of additional business activities that are at ...
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    A clearly defined route to profitability as described in a business ...
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    The financial benefit that a risk-taking activity will bring ...
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RELATED FAQS
  1. How do I calculate the Macaulay duration of a zero-coupon bond in Excel?

    A horizontal integration consists of companies that acquire a similar company in the same industry, while a vertical integration ... Read Full Answer >>
  2. Are there any practical differences between a wholly owned subsidiary and a regular ...

    There are differences between a wholly owned subsidiary, or a company 100 percent owned by another company, and a regular ... Read Full Answer >>
  3. What is the difference between a direct and an indirect distribution channel?

    A direct distribution channel is organized and managed by the firm itself. An indirect distribution channel relies on intermediaries ... Read Full Answer >>
  4. How do companies calculate the estimated duration of a new project?

    Different kinds of companies use different techniques to estimate project duration. For internal projects, estimation requires ... Read Full Answer >>
  5. How can an investor determine a company's annual return from looking at its financial ...

    The funds in a share premium account cannot be used for a company's general expenses. These funds are restricted in terms ... Read Full Answer >>
  6. How does automated work affect structural unemployment rates?

    One of the main causes of structural unemployment is the automation of work. If jobs become increasingly automated, more ... Read Full Answer >>
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