Which type of integration involves two businesses at different stages of production joining together?

The correct answer is vertical integration, which refers to the joining of two businesses that operate at different stages within the production process. This strategy allows a company to gain control over its supply chain, reduce costs, and increase efficiencies. When a business acquires or merges with other firms that either supply its raw materials (backward integration) or distribute its products (forward integration), it exemplifies vertical integration.

Vertical integration can enhance a company's competitive advantage by reducing reliance on external suppliers or distributors and streamlining operations. The ability to synchronize production and distribution processes can lead to improved quality control and faster response times to market demands.

In contrast, horizontal integration occurs when companies at the same stage of production combine, typically to increase market share or reduce competition. Conglomerate integration involves merging with businesses in entirely different industries, which does not focus on different stages of production. Diagonal integration is not a commonly recognized form of integration in traditional business contexts, as it typically refers to a combination of companies that operate in different industries but share similar functions, further distinguishing it from vertical integration.