Objectives and fetures of vertical combination

Objectives of vertical combination: Vertical business combination is based on the following objectives :

  • To increase the coordination amongst production processes.
  • To remove the middle men.
  • To eliminate or reduce unnecessary wastages.
  • To minimize transportation expenditure.
  • To minimize internal operation operation expenditure.
  • To maintain control over the quality of production.
  • To control the supply of raw materials.

Features of vertical combination : Following are the salient features of vertical combination
  • Where the finished object of one constitutes the raw material of another form.
  • Where one process is complementary to the others.
  • Where balanced production is important as in the case of spinning and weaving of cloth.
  • Where the control over the supply of raw material is necessary to maintain certain standard of quality for the finished product as in case of sugar Industry.

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