What is a key benefit of vertical integration for firms?

Vertical integration provides firms with greater supply chain control by allowing them to own and manage multiple stages of production or distribution. This level of control enables companies to streamline their operations, reduce dependency on external suppliers, and enhance coordination across different segments of their supply chain. As a result, businesses can respond more efficiently to market demands, minimize risks associated with supply disruptions, and ensure quality and consistency in their products and services.

By controlling additional stages of the supply chain, companies can make strategic decisions that align with their overall goals and optimize their logistics and inventory management. This consolidation contributes to improved operational efficiencies, allowing firms to adapt more swiftly to changes in the market environment. The benefits of enhanced control often lead to increased competitiveness and profitability in the long run.