Question

How did business leaders in the late nineteenth century utilize vertical integration? a. They maintained control of the raw materials necessary for their products. b. They delegated responsibility for production and distribution to subsidiaries. c. They maintained control of production and distribution of their products. d. They allowed market forces to dictate how their products were distributed.

Answer 1

Business leaders in the late nineteenth century utilized vertical integration by maintaining control of production and distribution of their products.

Answer: Option C

Explanation:

Vertical integration is a competitive strategy that gives the company full control over one or more stages of product production or distribution. Rockefeller tirelessly tried to take full control of business 'oil refinery'. While other business people were flooding the area in search of quick fortune, Rockefeller was thinking of destroying his rivals and creating a real monopoly in the refining industry.

Looking for even more control, Rockefeller saw the benefits of organizing the transportation to his products. Then, he began to develop his business through vertical integration, in which the company analyses all aspects of the product life cycle, from raw material extraction, through the production process, to the final delivery of the product.

Other industrialists quickly followed, including Gustavus Swift, who at the end of the 19th century used vertical integration to dominate the American meat packaging industry.