Vertical and Horizontal Integration

Vertical Integration is when the company has the ownership of production, distribution and exchange - the company is able to do everything itself. Therefore the company is able to gain all the profits. This is why a company like Sony has a lot of money because they are able do everything themselves compared to an independent company who don't have the money and pay to use facilities.

Horizontal Integration is when the company expands but instead of different areas it is the same area. For example music industries buying smaller industries. This allows the company to develop and expand the same area of the industry.