Differentiate between backward integration and forward integratio… - Vidyadip

Question

Differentiate between backward integration and forward integration.

✓

Answer

Base	Backward Integration	Forward Integration
Meaning	It refers to taking a step back (up) on the value-added chain towards the raw materials, which means, that the producer also becomes a raw materials wholesaler.	Forward, is taking a step forward (down) on the valueadded chain towards the customers which in this case means that the firm also becomes a finished goods wholesaler.
Busssiness Sharing	The firm becomes its own supplier.	The firm becomes its own buyer.

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