The process that begins with the acquisition of raw materials and ends with distribution and sales of finished goods and services is known as the vertical chain. However, the key is to organize the vertical chain to achieve optimized results upon integration.

For example: Arrow Electronics is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions, with 2013 sales of $21.4 billion. Arrow serves as a supply channel partner for over 100,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of more than 460 locations in 58 countries with over 16,500 employees worldwide.

The company has two business segments, the Global Components (GC) business and the Global Enterprise Computing Solutions (ECS) business. For 2013, approximately 63% of the company’s sales were from the GC business segment, and approximately 37% of the company’s sales were from the global ECS business segment. Over the past three years, the GC and ECS business segments have completed 15 and 5 strategic acquisitions respectively to broaden its product and service offerings and to further expand its geographic reach.

The company’s financial objectives are to grow sales faster than the market, increase the markets served, grow profits faster than sales, and increase return on invested capital. To achieve its objectives, the company seeks to capture significant opportunities to grow across products, markets, and geographies. To supplement its organic growth strategy, the company continually evaluates strategic acquisitions to broaden its product and value-added service offerings, increase its market penetration, and/or expand its geographic reach.