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LSDefine
Simple English definitions for legal terms
vertical competition
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A quick definition of vertical competition:
Vertical competition is when companies compete with each other at different stages of making a product. For example, a company that makes car parts might compete with another company that makes cars. This type of competition is called "vertical" because it happens up and down the supply chain.
A more thorough explanation:
Vertical competition refers to the competition between companies that operate at different levels of the same supply chain. This means that companies that are involved in the production, distribution, and sale of a product or service compete with each other.
For example, a car manufacturer competes with other car manufacturers, but it also competes with suppliers of car parts, dealerships that sell its cars, and even companies that provide financing for car purchases.
Another example is a clothing retailer that competes with other retailers, but also with clothing manufacturers, textile suppliers, and even shipping companies that transport the clothing to the retailer's stores.
These examples illustrate how companies that operate at different levels of the same supply chain can compete with each other. Vertical competition can be intense because companies are competing for the same customers and profits.