Vertical integration best describes which corporate strategy?

Vertical integration best describes which corporate strategy?

• A. A company merges with competitors in the same stage
• B. A company outsources all manufacturing
• C. A company expands its control over multiple stages of the value chain, from production to distribution
• D. A company focuses on a single stage of production

Answer: (C)

Vertical integration means expanding control over multiple stages of the value chain, from production to distribution. By owning or controlling different steps—such as suppliers, manufacturers, and distributors—a company can coordinate activities more closely, improve reliability, and potentially capture more of the value created along the chain, reducing dependence on external partners and cutting costs or margins lost to middlemen. This fits the described option because it explicitly describes extending control across several stages of how a product is made and delivered. The other ideas describe different approaches: partnering with or merging with competitors at the same stage is horizontal integration; outsourcing manufacturing means giving up internal production control; and focusing on a single stage is the opposite of expanding across stages.

Vertical integration means expanding control over multiple stages of the value chain, from production to distribution. By owning or controlling different steps—such as suppliers, manufacturers, and distributors—a company can coordinate activities more closely, improve reliability, and potentially capture more of the value created along the chain, reducing dependence on external partners and cutting costs or margins lost to middlemen.

This fits the described option because it explicitly describes extending control across several stages of how a product is made and delivered. The other ideas describe different approaches: partnering with or merging with competitors at the same stage is horizontal integration; outsourcing manufacturing means giving up internal production control; and focusing on a single stage is the opposite of expanding across stages.