Spanish translation: empresa verticalmente integrada
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English to Spanish translations [PRO] Law/Patents - Law: Contract(s)
English term or phrase:vertically integrated company
In backward vertical integration, the company sets up subsidiaries that produce some of the inputs used in the production of its products. For example, an automobile company may own a tire company, a glass company, and a metal company. Control of these three subsidiaries is intended to create a stable supply of inputs and ensure a consistent quality in their final product. It was the main business approach of Ford and other car companies in the 1920s, who sought to minimise costs by centralising the production of cars and car parts.
In forward vertical integration, the company sets up subsidiaries that distribute or market products to customers or use the products themselves. An example of this is a movie studio that also owns a chain of theaters.
In balanced vertical integration, the company sets up subsidiaries that both supply them with inputs and distribute their outputs.