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7 Examples of Forward Integration

Forward integration is a business strategy that involves expanding your business to control more of your supply chain in the direction of the customer. The following are illustrative examples.


A manufacturer of parts begins manufacturing finished goods. For example, a bicycle tire manufacturer who begins manufacturing bicycles.


A fast moving consumer goods company builds a distribution network including regional warehouses so that it can sell directly to retailers in many regions without going through a wholesaler.

Direct Selling

A producer begins selling directly to end customers. For example, a farmer who begins to sell goods at a farmer's market.


A manufacturer opens its first shops to offer customers a complete brand experience. For example, a snowboarding brand that opens shops at popular resorts to improve its brand recognition, brand image and relationships with the snowboarding super culture.


An ecommerce firm that begins a delivery service to reach the customer without the services of delivery companies. This may be done to reduce costs, improve turnaround time and offer value-added services to customers.


A software company begins to offer consulting and software development services as opposed to relying on a network of partners to help customers implement their products.

Customer Service

An ecommerce company insources customer service functions that were previously outsourced. This may be done to improve the customer experience.

Forward Integration vs Vertical Integration

Vertical integration is the strategy of taking over more of your supply chain. Forward integration is vertical integration in the direction of the customer.

Forward Integration vs Backward Integration

Backward integration is the strategy of taking over more of your supply chain in the opposite direction of your customers. For example, a jam company that begins growing its own fruit.
Overview: Forward Integration
A business that takes over more elements of its supply chain in the direction of the customer.
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