Quasi-Vertical Integration


Definition: Quasi-Vertical Integration is the ownership by 1. a downstream firm (= further in the supply chain, closer to the point of end consumption) or by 2. an upstream firm of specialized tools and equipment or assets used in the primary processes of 1. its supplier or 2. its customer.
An example of the first is an automotive assembler owning all special tools utilized by a dashboard manufacturer to fabricate its dashboards. An example of the second is a beer brewer owning all inventory of the bars that are selling (only) its beer brand.
In QVI, the controlling firm has a powerful position, but less powerful than in (real) vertical integration, when the controlling firm owns his supplier or customers.



More on quasi-vertical integration. More on collaboration: Backward Integration, Forward Integration, Joint Venture, Strategic Alliance, Vertical Integration, more...


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