USA HISTORY

Detailed explanation-1: -Vertical integration requires a company’s direct ownership of suppliers, distributors, or retail locations to obtain greater control of its supply chain. The advantages can include greater efficiencies, reduced costs, and more control along the manufacturing or distribution process.

Detailed explanation-2: -In addition, Carnegie Steel bought up its sources of raw materials and shipping (in a strategy called vertical integration) and bought out and absorbed its competitors (horizontal integration) to dominate the steel industry. By the 1890s, it was the largest and most profitable steel company in the world.

Detailed explanation-3: -Vertical Integration was a process in which Andrew Carnegie bought out his suppliers such as, coal fields, , iron mines, ore freighters and railroad lines. b. How did it help businesses such as the Carnegie Company and tycoons like Andrew Carnegie? He did this to control the raw materials and transportation systems.

Detailed explanation-4: -Vertical integration can allow your business to expand geographically by adding distribution centers in new areas or by acquiring a new brand. Generally, geographical expansion works best when expanding within a company’s own segment in the supply-distribution spectrum.

Detailed explanation-5: -Andrew Carnegie used vertical integration to reduce competition and make his business more profitable by purchasing companies that provided the raw materials and services he needed to run his steel company.