Difference Between Forward and Backward Integration

Key Difference – Forward vs Backward Integration

All businesses are a part of a value system (a network where the company is connected with its suppliers and customers), where many organizations work in collaboration to deliver aproduct or serviceto the customers. Both forward and backward integration are forms of垂直整合, i.e., where the company integrates with other companies who are in different steps on the same production path; for instance, with manufacturers and distributors. Forward integration is an instance where the company获取或合并with adistributor或零售商，而向后集成是公司收购或合并的实例supplieror manufacturer. This the key difference between forward and backward integration.

内容
1.Overview and Key Difference
2.什么是前向整合
3.什么is Backward Integration
4.并排比较 - 前向向后集成
5.概括

什么是前向整合？

Forward integration is a business strategy where the company merge with or acquire a company that provides services to deliver the product to the end customer. This alliance can be with an intermediate distributor or a retailer.

E.g. If a brewery enters into an alliance with a company selling beer, this is a form of forward Integration

Disney provides a sound real life company example of forward integration where the company purchased more than 300 retail stores that sell merchandise based on Disney characters and movies.

什么is Backward Integration?

If the company decides to enter into an alliance with a manufacturer or a supplier by way of获取或合并，这称为向后集成。这样做是为了提高效率并节省成本。

E.g. A bakery business purchasing a wheat processor or a wheat farm is a form of backward integration since it is a supplier of ingredients

Ford Motor Company incorporatedsubsidiaries向其车辆（例如橡胶，金属和玻璃）提供密钥输入。Amazon.com和Tesco等其他受欢迎的全球公司也以类似的方式与供应商合作。

一些公司在更大程度上实践垂直整合，这些集成既落后又远程整合。苹果公司是一家公司，它与硬件和苹果零售商店的制造商集成在一起，专门出售公司的产品。

垂直集成有助于健康的业务沟通和关系，因为两家或多个公司会协作为最终客户提供业务。由于所有涉及的组织都有一个共同的目标，因此目标一致性已建立。交易成本较低，对高质量的承诺。

Despite the advantages forward and backward integration, these two options may not be viable for many companies. Some supplier or distributors may prefer to do business independently since they have significant capacity and the ability to enjoy greater规模经济(cost advantage that arises with increased output of a product). For instance, DHL the world’s largest logistics company has vast economies of scale and very efficient distribution channels; thus, they will not consider entering into联盟with other companies.

向前和向后集成有什么区别？

Forward vs Backward Integration
在远期整合中，公司收购或合并分销商。	Backward integration is where the company acquire or merge with a suppler or manufacturer.
目的
远期整合的主要目的是实现更大的市场份额。	The main purpose of backward integration is to achieve economies of scale.

概括– Forward vs Backward Integration

The difference between forward and backward integration depends on whether the company integrates with a manufacturer/supplier or distributor/retailer. Other than that, they share widely similar structure, merits and demerits, as both are forms of vertical integration. The success in vertical integration always depends on the ability of two or more firms to work together towards a common goal. Partners in a vertical integration arrangement have different levels of bargaining powers and this may even lead to conflicts among them at times. These has to be controlled and resolved in order to achieve increased benefits from the alliance.

Reference:
1.“向后整合。”Investopedia。N.p., 07 Mar. 2015. Web. 02 Mar. 2017.
2.“集成策略 - 公司级策略 -Strategic Mana。” LinkedIn SlideShare. N.p., 17 July 2015. Web. 02 Mar. 2017.
3.“集成策略 - 公司级策略 -Strategic Mana.” LinkedIn SlideShare. N.p., 17 July 2015. Web. 02 Mar. 2017.
4. “Advantages And Disadvantages Of Vertical Integration.”OccupyTheory。N.p., 08 May 2015. Web. 02 Mar. 2017.
5.“前向整合。”Investopedia。N.P.，2015年8月8日。2017年3月2日。

Image Courtesy:
1. “Integration in English” By Integration.png: Martin Sauterderivative work: Andrew c (talk) – Integration.png(CC BY-SA 3.0)viaCommons Wikimedia