Companies adopt vertical integration to achieve several strategic advantages:
1. Cost Efficiency: By eliminating intermediaries, companies can reduce transaction costs and increase profit margins. 2. Quality Control: Managing the entire supply chain allows businesses to maintain consistent quality standards. 3. Market Control: Vertical integration can limit competition by controlling the supply of raw materials and distribution channels. 4. Synchronization: Enhanced coordination between different production stages can lead to better inventory management and reduced lead times.