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Backward vertical integration

Backward vertical integration is a business strategy in which a company expands its operations by acquiring or merging with companies that supply its raw materials or intermediate goods. The goal of backward vertical integration is to gain greater control over the production process and reduce costs by cutting out intermediaries.

For example, a clothing manufacturer might vertically integrate backward by acquiring a textile manufacturer that supplies the fabric used in their clothing. This can increase the manufacturer's control over the quality and price of the raw materials, as well as reduce the time and cost of obtaining those materials. Backward vertical integration can be an effective strategy for companies looking to increase efficiency, reduce costs, and gain a competitive edge in their industry.

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