Andrew Carnegie used vertical integration in his steel business to help him reduce his competition and to make his business more profitable. Carnage’s company controlled every aspect of the production of his steel. He owned the mills, the mines, the ships, and the railways, etc. , which enabled him to maximize his profits. This helped him to reduce the stress brought on by other competitors. He was also able to cut the costs of steel significantly which encouraged many buyers to go to him instead of his competitors.
McDonald’s uses vertical integration to help reduce competition and make business more refutable just like Carnegie did.
McDonald’s demonstrates both sides of vertical integration. They use backwards vertical integration by owning the farms where they get their beef, chicken, potatoes, and wheat from while also owning the processing factories that make all things from big Macs to quarter founders with cheese. They employ forwards vertical integration by owning the centers of distribution and the actual fast food restaurants.
Since they use both these methods the McDonald’s corporation uses what is known as balanced vertical integration. Think of this country on a large scale as a company.
The government wants all of their “suppliers” (the people of the U. S. ) to want jobs, build houses, have kids in their school, pay the taxes. This shows that the government wants us to do the work for them so that they can produce the best “profit”. An advantage of vertical integration on society is that it provides local companies with better opportunities against their competitors and that it just creates a sense of unity among the people of this nation. This integration can also lead to negative impacts on our society.
Cite this Assignment history
Assignment history. (2018, Jun 06). Retrieved from https://graduateway.com/assignment-history/