What Are the Three Integrative Strategies Used in Business?

The three integrative strategies used in business are vertical integration, horizontal integration and functional integration. In vertical integration, a company is controlling the upstream and/or downstream elements in their supply stream. Horizontal integration involves a company expanding into or acquiring diversified product lines. Functional integration is a marketing approach in which an interconnected and expanding system of services and products increases customer entry points, participation and brand loyalty.

Functional integration is a more recent approach to marketing that reorients customers away from an item-based focus and toward a company ecosystem consisting of much more than a single product or service. The goal is to develop a customer awareness of the company as a source of interconnecting products and systems that work together to enhance and build upon each other to create a growing and integrated benefit. Each new purchase or entry point into the company's ecosystem expands the customer's functionality and satisfaction level.