Forward integration
Forward integration is a business strategy where a company expands its operations to control the distribution of its products or services. This can involve acquiring or creating new channels of distribution, such as retail stores or online platforms, to sell directly to customers.
One example of forward integration is a clothing manufacturer opening its own retail stores to sell directly to consumers, cutting out the middleman of third-party retailers. This allows the company to have more control over pricing, branding, and customer experience.
Another example is a software company offering its products directly to businesses through its own sales team, rather than relying on third-party distributors. This can help the company build stronger relationships with customers and provide better support services.
Overall, forward integration can help companies increase their market share, improve profit margins, and enhance customer relationships by taking more control over the distribution of their products or services.
Benefits of forward integration:
- Increased control over distribution channels
- Improved profit margins
- Better customer relationships
- Enhanced brand visibility
For more information on forward integration, you can visit Wikipedia.