Friday, May 22, 2020

The Benefits of Vertical Integration


Ranjeet Reddy Paladugu headshot


Ranjeet Reddy Paladugu is an experienced senior-level executive with an MBA from Cornell University in addition to executive education certifications from the MIT Sloan School of Management. Ranjeet Reddy Paladugu is also the founder and CEO of an investment firm focused on maximizing the business potential of clients and providing a full spectrum of service offerings to customers through a vertically integrated business structure.

Vertical integration refers to a business strategy within the supply chain. Unlike horizontal integration, which involves control of other companies in the same industry, vertical integration requires oversight of suppliers, distributors, and even retail locations.

Vertically integrated businesses hold control over the entire range of activities in a value chain that is required to create a product or offer a service. This structure allows companies to maximize efficiency while reducing costs. Moreover, vertical integration improves profitability by enabling companies to create and market original brands, while also minimizing supply chain disruptions stemming from external suppliers.