If a producer owns the intermediary at the next level down in the channel, it is referred to as backward integration.

Question

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Backward integration refers to a company acquiring or merging with companies that supply its inputs, not the intermediaries at the next level down in the channel. Forward integration, on the other hand, involves a company owning or controlling the distribution or retail outlets where its products are sold.

If a Producer Owns the Intermediary at the Next Level