What do vertical industries mean?
Verticals describe companies that cater specialized services and products to a specific audience within a particular niche. For example, Whole Foods focuses on organic grocery products and caters to organic grocery consumers. Similarly, Brickhunter focuses on a brick-buying business and Parts Market on trading in used car parts.
What are horizontal and vertical markets?
Horizontal and vertical markets are markets where vendors offer goods and services either specific to a particular industry and clientele or to a wide range of buyers across many industries.
What is the difference between vertical and horizontal marketplaces?
The difference between vertical and horizontal markets lies in their specialization or lack thereof. Thus, verticals cater to a specific audience and specialize in a particular industry. Horizontals do not target any particular markets, but rather trade in different products and services across various industries.
What are examples of horizontal and vertical markets?
Virtually any business can trade either horizontally or vertically. For example, a bookstore can trade horizontally to anyone willing to spend a dollar on a new book, or vertically to parents and children. Another example can be a stationery business that typically trades horizontally – many industries require pens and paper. On the contrary, a company that develops patient-scheduling software trades vertically, because it caters to a specific clientele, such as healthcare. To put it succinctly, vertical businesses trade in specialized products and specialized services, whereas horizontal businesses do not specialize in any particular product or service.
What are the pros and cons of horizontal and vertical markets?
The pros of horizontal markets are scalability, low barriers of entry, abundant workforce, and less impact from demand fluctuation.
The cons of horizontal markets are the lack of specialization, high competition, and reduced flexibility.
The pros of vertical markets are reduced competition, higher prices, customer loyalty, and cost-effectiveness.
The cons of vertical markets might be a lack of innovation, higher barriers of entry, and potential revenue limitations.
What is vertical market application software?
Vertical market software is a software developed specifically for a unique clientele, typically for businesses within a niche industry. Examples of vertical market software can be applications developed for banking businesses, real estate agents, investment funds, etc.
What are the major business verticals?
The major business verticals are companies working in the agriculture, defense, and chemical industries. Although discussed previously, it’s worth noting that almost all verticals can be narrowed down further. For example, financial services companies can specialize in underwriting or mortgage processing; similarly, internet technology companies can specialize in business to business ecommerce software or website design.
What does vertical mean in digital marketing?
In marketing, verticals have come to describe the markets where brands cater to a specified group of customers. Those brands typically do not serve broader markets, but instead specialize on catering to the market’s particular needs.
Vertical business to business companies are those that provide goods and services within one industry. An example of a very narrow B2B vertical is AirbusWorld, a collaborative customer portal and marketplace for better collaboration with operators of Airbus Helicopters' global network.
What is vertical advertising?
Vertical advertising is a strategy that companies apply to target customers within a particular industry. This way, insurance companies target customers who might be interested in buying insurance, while car parts manufacturers will target automobile companies, and so on.
What is an example of vertical integration?
Vertical integration implies acquiring, merging, or creating businesses and business processes within the same industry. For example, Netflix’s original content venture that supplements its main streaming services can be considered a vertical integration.
What are the different types of verticals?
There are three main types of verticals: corporate, administered, and contractual. Corporate verticals combine market stages under single ownership; administered are those coordinated by one company; and contractual verticals are created by independent businesses that combine market stages.
Is retail an industry or a vertical?
Retail is an industry. However, within retail, there might be multiple verticals, such as food and grocery, footwear, jewelry, etc.
What is a vertical retail distribution strategy?
A vertical retail distribution strategy is where a retailer bypasses intermediaries and designs, produces, and sells its own products. Some of the prominent vertical retailers are Uniqlo and H&M.
Is the automobile industry vertically integrated?
The automobile industry is considered one of the most vertically integrated sectors, since automobile companies strive to own as much of a supply chain as possible.
What car companies are vertically integrated?
Tesla is considered the brightest example of a vertically integrated car company.
What are the types of vertical integration?
There are three types of vertical integration: backward, forward, and balanced. Backward integration is when a company controls its subsidiaries that produce product parts. For example, a car manufacturing company may seek to control companies that produce tires, engines, etc. In contrast, forward integration is when a company owns distribution centers and retailers. For example, a brewing company may control pubs and bars. This way, a balanced integration is when a company seeks to manage its manufacturing subsidiaries and distributors.
What is vertical competition?
Vertical competition describes the competition that happens along a channel or a value chain, where vertical competitors compete on how much they get from the total revenue relative to each other.
What does vertical mean in economics?
Vertical describes a market where companies offer goods and services specific to a trade, profession, industry, sector, and so on.