What is the primary focus of vertical integration in business strategy?

The primary focus of vertical integration in business strategy is on controlling supply chain processes. This approach involves a company taking direct ownership or control over its suppliers or distributors to streamline operations, reduce costs, and improve efficiencies within its supply chain. By integrating vertically, a business can better manage the production process from raw materials through to finished products, resulting in enhanced control over quality, lower transportation costs, and reduced supply chain risks.

Vertical integration can manifest in two ways: forward integration, where a company moves closer to the end consumer (e.g., a manufacturer opening retail outlets), and backward integration, where a company takes control over its suppliers (e.g., a bakery purchasing a wheat farm). This control allows businesses to mitigate supply risks and improve product availability, ultimately leading to a competitive advantage in their industry.

The other options focus on areas outside the primary aim of vertical integration. For instance, expanding market reach generally pertains to horizontal growth strategies, while increasing brand recognition is more aligned with marketing efforts. Diversifying product offerings relates to gaining a wider market presence or reducing risk, rather than directly controlling the supply chain. Each of these other choices represents critical components of a broader business strategy but do not encompass the essence of what vertical integration intends to achieve.