Vertical integration refers to the number of steps in a value chain that a company has internalized. The more steps that a company controls, the more vertical integration it has. To see how vertically integrated Cessna is, I actually want to step back and talk about its parent company, Textron.
Cessna was acquired by Textron in 1992, placing it in a conglomerate of other companies owned by this giant. Let's take a look at a standard new Cessna 172 and see which components come from inside Textron and which are from outside manufacturers:
Airframe: Cessna 172; manufactured by Cessna aviation (internal)
Avionics: Garmin G-1000 suite; manufactured by Garmin (external)
Engine: Lycoming IO-360-L2A 180 hp piston; manufactured by Lycoming (internal)
Propeller: McCauley two-bladed fixed pitch propeller; manufactured by McCauley (internal)
Of the major components to producing an aircraft, Textron has internalized everything except for the avionics. This goes a long way in terms of decreasing costs to produce a new Cessna 172 and streamlining manufacturing.