Types of integration

There are four methods through which a business can merge with or take over another business.

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Horizontal integration occurs when two competitors join through a merger or takeover. The new business then becomes more competitive and increases its market share. This gives it more control when negotiating and setting prices.
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Forward vertical integration occurs when a business takes control with another that operates at a later stage in the supply chain.
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Backward vertical integration occurs when a business takes control of a business earlier in the supply chain.
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Conglomerate integration occurs when businesses in unrelated markets join through a takeover or merger. This enables businesses to spread their risk over a wider range of products and services.