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Differences between Backward Integration and Forward Integration:

Various forms of intensive expansion are:
(a) Penetration Strategies
(b) Market Development Strategy
(c) Product Development Strategies.
A profit market expansion can assume following forms:

Penetration Strategies: This is a strategy to grow by encouraging existing customers to buy more of the
firm’s existing product. Here, the enterprise tries and attempts to increase the sale of the current
products in the current markets by following approaches:
(a) Encourage frequency of use of the product.
(b) Attract new clientele using sales promotion techniques like Advertising, Personal selling, Discounts,
Coupons, etc.
(c) Attract Competitors Customers by using persuasive techniques.

Two firms are available to an entrepreneur to go in for integrative expansion, they are Vertical
Expansion and Horizontal Integration.
(a) Vertical expansion refers to any of the activities or functions, previously performed by the firm right
from sourcing of raw material to supply of finished goods, through external agencies will now be
performed by the firm itself. It is done through:
Backward Integration: It is a step back on the value-added chain towards the raw materials, by which
the producer also becomes a raw materials wholesaler. For example: For manufacturing of ‘Nirma’
detergent an important raw material used ‘Linear Alkaline Benzyne’ (LAB) which was earlier purchased is
now manufactured by Nirma itself.
Forward Integration: It refers to taking a step forward on the value added chain towards the
customers by which the firm also becomes a finished goods wholesaler.
(b) Horizontal integration occurs at the same level of the value added chain but .involves a
complementary, value added chain. It may involve acquisition of one
or more competitors at the same level of business.
For example: Hindustan Lever Ltd. has ensured for itself a presence in all segments using new brand
launches and by strategic moves such as the acquisition of TOMCO.
The acquisition of TOMCO enhanced HLL’s market share like it bought Hamam, 501, Moti, Jai and OK
into HLL’s brands, with already having Lifebuoy, Liril, Lux, Rexona, Dove, LeSancy as its powerful line
extensions.
(iii) Market development strategies refers to selling the firm’s existing products to new groups of