The consolidation of different stages of production within a single company is a business strategy widely adopted during the industrialization of the United States. This process involves acquiring control over various points along the supply chain, from raw materials to distribution. An exemplar of this approach is Andrew Carnegie’s steel empire, which owned iron ore fields, transportation networks, and processing plants, ensuring control over every aspect of steel production.
This business model provided several advantages, including reduced transaction costs, increased efficiency, and greater control over product quality and supply. By eliminating reliance on external suppliers and distributors, companies could minimize uncertainties and maximize profits. The historical context reveals that this strategy played a crucial role in the growth of large industrial conglomerates during the late 19th and early 20th centuries, shaping the economic landscape of the nation.
