In vertical integration, businesses join at which stage?

Vertical integration occurs when a business expands its operations into different stages of production within the same industry. This strategy allows a company to take control of parts of its supply chain, enhancing efficiency, reducing costs, and improving market position. By integrating vertically, a business can manage more of the production process, from raw materials to final product delivery, which can lead to better quality control and a more streamlined operation.

For example, a manufacturer may choose to acquire a supplier of its raw materials, thus controlling not just the production of finished goods but also ensuring a steady and reliable supply of necessary components. This type of integration can also facilitate more coordinated efforts in research and development and alignment of production schedules.

The other options do not accurately represent vertical integration: joining at the same stage of production refers to horizontal integration; joining different industries reflects diversification rather than vertical integration; and joining the same industry without a focus on varying production stages does not capture the essence of vertical integration.