Vertikální integrace
Vertical Integration · Supply Chain Control
A company owns more stages of its own supply chain instead of buying from external suppliers — from raw materials or components through to end-customer sales.
What it is
Vertical integration means the company owns and controls more stages of production or distribution of its product, rather than purchasing them from external suppliers or distributing through them.
Backward integration — the company takes control over suppliers (a manufacturer buys or builds its own component or raw material production). Forward integration — the company takes control over distribution or sales (a manufacturer opens its own stores instead of only selling through retail chains).
The opposite is a horizontal/asset-light model — the company focuses on one layer of the chain and outsources the rest (see Asset-Light).
Why track it
Vertical integration can create a moat through control of costs, quality, or supply — but at the cost of higher capital intensity and lower flexibility. Monitor whether integration actually improves margins and ROIC, or merely increases CAPEX without a corresponding benefit.
High vertical integration increases operating leverage — fixed costs of owned infrastructure are harder to scale down in a demand slowdown than for a company buying flexibly from external suppliers.
Real-world example
Tesla manufactures its own batteries and sells directly to customers without a dealer network — both backward integration (batteries) and forward integration (direct sales). Apple designs its own chips (backward integration into semiconductors) but outsources manufacturing to external partners (TSMC) — partial integration, not complete.
Watch out for
Vertical integration typically moves a company from an asset-light model toward asset-heavy — higher CAPEX intensity, lower short-term FCF conversion. The advantage of supply chain control must be weighed against this capital burden, not treated as automatically positive.