Vertical Integration

A corporate restructuring in which a firm extends its ownership or tight contractual control into upstream (suppliers) or downstream (distributors/customers) stages of the same product or service chain, thereby internalizing transactions that previously occurred across firm boundaries.

An organizational strategy in which a single firm controls two or more sequential stages of the apparel value chain—such as raw material processing, yarn/fabric production, garment manufacturing, logistics and retail—so that activities previously coordinated via market transactions are brought under the firm's ownership or tight operational control.