Vertical Market

AAA

DEFINITION of 'Vertical Market'

A group of companies that serve each other's specialized needs and that do not serve a broader market. A vertical market is tightly focused on meeting the needs of one specific industry. Vertical markets are focused on a single niche, such as creating payroll software for start-up Internet companies. A horizontal market, by comparison, is able to sell its goods and services in more than one industry, and is therefore focused on a wider range of business segments.

INVESTOPEDIA EXPLAINS 'Vertical Market'

A company that manufactures automobile parts would belong to a vertical market. It would have a limited market of - auto manufacturers and mechanics - for its products. A furniture manufacturer, on the other hand, would belong to a horizontal market because its customer base could include homeowners, apartment dwellers, offices, hotels, restaurants and more.

RELATED TERMS
  1. Horizontal Integration

    The acquisition of additional business activities that are at ...
  2. Horizontal Market

    A market diversified so that the products created are able to ...
  3. Forward Integration

    A business strategy that involves a form of vertical integration ...
  4. Vertical Integration

    When a company expands its business into areas that are at different ...
  5. Vertical Merger

    A merger between two companies producing different goods or services ...
  6. Marginal Rate of Technical Substitution

    The rate at which one factor has to be decreased in order to ...
Related Articles
  1. Entrepreneurship

    8 Tips For Starting Your Own Business

  2. Fundamental Analysis

    Where's The Market Headed Now?

  3. thinkstock|istock
    Economics

    Understanding Supply-Side Economics

  4. Economics

    Where is cost of living lowest in the ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center