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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