Vertical integration in petrochemicals—2. Strategies and problems

In Part 1 of this series of three papers, the methods of measuring vertical integration and related concepts were discussed. Part 3 will describe the analysis of some 10 large chemical companies and the problems of developing and interpreting the data. In this Part 2, the conditions under which companies become vertically integrated are discussed. It is helpful to do this in two ways, looking first towards the suppliers, ‘upstream’ or backwards, and then towards the customers, ‘downstream’ or forwards. Some of the concepts have already been developed in the literature, others have arisen in debates with marketing colleagues over many years and it is not now possible to make detailed acknowledgments.