Which term describes a company owning multiple stages of its supply chain to control production?

• A. Vertical Integration
• B. Horizontal Integration
• C. Market Consolidation
• D. Diversification

Answer: (A)

Vertical integration is when a company controls several steps of its production process—from sourcing raw materials to manufacturing and distributing the finished product. This setup reduces costs, lessens dependence on external suppliers, and helps coordinate timing and quality across different stages of production. In the late 1800s and early 1900s, U.S. industrial giants sometimes owned iron ore mines, coal fields, ships, mills, and distribution networks to keep production steady and prices stable. The other strategies describe different approaches: horizontal integration is about merging with competitors at the same production stage; market consolidation is a broad merging trend; diversification means expanding into unrelated lines of business.