Mechanism
Vertical Integration
TL;DR
Vertical integration creates fractal depth rather than horizontal breadth.
Biological systems demonstrate vertical integration where outputs of one process become inputs for the next - digestion → absorption → metabolism → energy production.
Business Application of Vertical Integration
Vertical integration creates fractal depth rather than horizontal breadth. Each level feeds the next (oil → refining → petrochemicals → polymers → textiles → retail), capturing margins at every level and providing supply chain resilience through internal transfer pricing. Trade-offs include coordination complexity and technological lock-in.