What Are the Three Integrative Strategies Used in Business?

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.