Which practice involves a single company controlling multiple stages of production for a product?

• A. Consortium
• B. Vertical integration
• C. Horizontal integration
• D. Franchising

Answer: (B)

The practice that involves a single company controlling multiple stages of production for a product is vertical integration. This strategy allows a company to streamline operations by managing various phases of the production process, from acquiring raw materials to manufacturing goods and distribution. By controlling these stages, a company can reduce costs, improve efficiency, and maintain better quality control, ultimately leading to increased profitability.

Vertical integration can take several forms, including backward integration, where a company acquires its suppliers, and forward integration, where it takes control of its distribution channels. This approach was notably used by companies like Carnegie Steel in the late 19th century, which controlled everything from iron ore mines to transportation and steel production.

In contrast, other options represent different business strategies. A consortium refers to an association of several companies or organizations working together towards a common goal, which does not imply control over production stages by a single entity. Horizontal integration involves one company acquiring or merging with its competitors at the same stage of production, thereby increasing market share rather than controlling additional stages of production. Franchising is a business model where one party grants another the right to market its products or services, which does not relate to controlling stages of production. Thus, vertical integration is distinct in its focus on encompassing various levels