Vertical Market
QuickDef: A vertical market is what can be defined and broken down into specific segments.
Complete Definition: A vertical market is what can be defined and broken down into specific segments. It could be that the industry is automobiles. Each step that needs to be completed for the car to be built is part of the vertical market. You have the body of the car, you have the interior cosmetics, you have the dashboard electronics -- essentially, each step of the process is taken into consideration and is part of the vertical market for that particular product or industry.
Here's an example
Let's take a look at the Procter & Gamble acquisition of Gillette company that took place in early 2005. Gillette is a reputable company for providing quality razors and like products for consumers. So why would P&G see a benefit for acquiring Gillette? Some of the Gillette products used batteries. You may or may not know, but P&G also owns Duracell [batteries]. So it made sense for P&G to spend USD$57 billion to buy Gillette.
The Gillette acquisition helped P&G's vertical market because in every razor that Gillette put out needed a battery. P&G saw a future for Gillette to be provided with batteries through their own Duracell company as a means to keep revenue within the same company. So far, P&G has done quite well with the acquisition and are growing just as they had hoped.
