What economic strategy involves the purchase of companies at all levels of production?

The concept of vertical integration refers to an economic strategy where a company takes control over multiple stages of production or the supply chain. This means that a business acquires companies that are involved in different steps of producing their product, from raw materials to manufacturing to distribution. By doing so, a company can streamline operations, reduce costs, and gain greater control over its resources, ultimately leading to increased efficiency and profitability.

In contrast, horizontal integration involves acquiring companies that operate at the same level of the supply chain or industry, often to increase market share. Market saturation refers to a scenario where a market is fully supplied with a product, leading to diminished opportunities for growth. Capital accumulation focuses on the amassing of financial resources or assets to further investments and growth.

Understanding vertical integration helps explain how businesses can enhance their operational capabilities and improve their market position by controlling various facets of production and distribution, which is critical for strategic management in a competitive environment.