What is one advantage of vertical integration in business operations?

Vertical integration refers to a business strategy where a company takes control over multiple stages of its supply chain, from production to distribution. By adopting this approach, a business can exert more control over its supplies, which allows for several advantages.

One key benefit is the improvement in supply chain efficiency. With better control over the sources of raw materials or components, a company can ensure that it has a consistent quality and quantity of supplies, reducing the potential for delays that can arise from relying on third-party suppliers. This leads to more predictable production schedules and potentially lower costs through economies of scale.

Moreover, having control over the supply chain enhances a company's ability to respond to market changes, as it can swiftly adjust its production processes without waiting on external suppliers. This agility helps businesses maintain a competitive edge in the marketplace.

In contrast, the other options would not provide the same advantages associated with vertical integration. Increased market competition typically refers to the dynamics of competitive markets rather than control over supplies. Higher production costs are often a concern with vertical integration if the company does not manage its operations efficiently. Limited customer reach could be a challenge with some business strategies, but vertical integration can actually help expand market reach by ensuring better availability of products through a streamlined supply chain.