23-AGO-2007 - Pay attention to horizontal and vertical...

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Pay attention to horizontal and vertical integration: o Horizontal: the farmer gets involved in the production of one commodity. The farmer engages in multiple careers. He does it to not be dependent, so if the market falls he can survive. Don’t put all eggs in one basket. For instance, the farmer raises cattle and poultry. o Vertical: The farmer gets involved in more than one step or stage in the production. For example, growing hay in order to feed your cattle. He does it to cut out the middle man in order to have a bigger share of the profits. The structure of business in general. This applies to everything from a farm to an incorporated company. o Sole proprietorship: only one owner or group of owners that are of the same family. Strength: one set of profits. Weakness: Unlimited liability. This means that if the business fails the owner loses everything. o
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This note was uploaded on 04/11/2008 for the course AAEC 1005 taught by Professor Mjellerbrock during the Fall '07 term at Virginia Tech.

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23-AGO-2007 - Pay attention to horizontal and vertical...

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