What is meant by local integration?

Understand Vertical Integration and Horiziontal Integration?

• chart the steps of the steel making process and who owns the means to accomplish these steps in a vertical integration and horizontal integration. Then, think about the advantages of having vertical integration as opposed to horizontal integration. how does vertical integration affect competition? if you think you can help please answer!!!

• Answer:

  1. Wikipedia is your friend: http://en.wikipedia.org/wiki/Vertical_integration http://en.wikipedia.org/wiki/Horizontal_integration 2. Shell Petroleum is the classic example of vertical integration: it searches for oil; drills for wells; pumps and transports the oil; refines it to gasoline, diesel fuel, and other retail products; and sells them in stores and in in its own gas stations. On the other hand, a big chemical company such as Dupont or BASF is horizontally integrated - it buys the raw materials from other companies and makes a very wide range of products, most of which are sold as raw materials to other companies rather than to the end-users. 3. The advantages and disadvantages clearly depend on the business and the situation. Neither the managers at Dupont nor the ones at Shell are idiots - they all have good reasons for having arrived at the management structure they have. But you might note that while Shell really hasn't come up with any new products recently, would find it hard to go into alternative energy, etc., Dupont has created all sorts of new products http://en.wikipedia.org/wiki/DuPont http://en.wikipedia.org/wiki/Royal_Dutch_Shell