What is meant by ownership by a single company of all levels of production and distribution?

Ownership by a single company of all levels of production and distribution is referred to as vertical integration. This strategy allows a company to control the entire supply chain, from raw materials to the final product, as well as the distribution of that product to consumers. By doing so, a company can improve efficiency, reduce costs, and enhance its ability to respond to market changes.

Vertical integration can take two forms: forward integration, where the company takes control of distribution or retail operations, and backward integration, where it secures supply sources by controlling production tiers. This comprehensive oversight helps ensure quality consistency, streamline processes, and increase market power.

In contrast, horizontal integration involves a company acquiring or merging with other companies at the same level of production, often to increase market share or reduce competition, but it does not address control over multiple levels of the supply chain. Market segmentation is the strategy of dividing a market into distinct groups of buyers with different needs or behaviors, while product diversification refers to a strategy where a company expands its product offerings. These strategies have different objectives and do not pertain to ownership across various production and distribution stages like vertical integration does.