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.