Andrew Carnegie Steel Vertical Integration

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Carnegie Steel Vertical Integration Andrew Carnegie was a master of using vertical integration to not only grow his business, but also to control the environment in which his business existed. Carnegie was able to employ backward vertical integration by buying out his suppliers for the raw products he needed to produce his ultimate product, steel. If Carnegie owned the iron mines needed to produce the ore for steelmaking, then he could have a constant and consistent source of raw material. In turn, if he controlled the coal mines, he would have a neverending source of power to fuel the steel mills, which he also owned, to manufacture his product. Incorporating forward vertical integration, if Carnegie owned the railways and ships needed to transport his product to buyers in other markets, then he could control accessability of his product and the costs related to…show more content…
All of these acquisitions created an efficiency that had previously rarely been witnessed and allowed Carnegie a huge amount of power throughout his industry. Since all of the different industries needed to manufacture and sell Carnegie steel were related, Carnegie was also able to avoid entering into areas that he and his company were not equipped to deal with, thus lessening his overall risk. He was in complete control of the quality of his product, how it was made, and how profitable he would be after it was sold. No other company without the capital or a similar business strategy could possibly hope to compete in the market or form any sort of threat to Carnegie's dominance of the steel industry. Vertical Integration within the Disney Corporation The Disney Corporation is a great modern day example of vertical integration. While the Disney Corporation began as a cartoon production studio, they quickly expanded to be

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