Carnegie’s Steel Company and Vertical Integration Andrew Carnegie was the pioneer of the vertical integration system. The vertical integration system is a system of related companies that has a parent company who owns its suppliers. This system allows the parent company to control how much the company pays for its supplies. This, in turn, increases the company’s profits. Andrew Carnegie bought out his suppliers. His suppliers produced raw materials and provided certain services that he needed in order for his steel company to produce. He did everything in his power to control his payments of goods which made his steel production cheaper. As Carnegie’s steel cheapened, so did the cost to build bridges and other land developments. However, because …show more content…
Walt Disney World benefits mainly from its use of vertical integration. As Disney developed its strategies for vertical integration, the company was able to reach its borders out to develop a better way to distribute its products. After producing and distributing its products, Disney needed to develop venues to house those products. Therefore, Disney bought store fronts to sell their products in. As popularity grew from Disney movies, Disney began to buy land to open theme parks on. In these theme parks, the company would also sell its products through the theme parks. This would enormously increase Disney’s profits. As popularity continued to increase, Disney began buying channels to place Disney produced films or shows. After gaining huge success in America, Disney branched out even more. The company began opening theme parks throughout the world. Along with that, Disney began showing, and selling its products worldwide. Disney was able to buy its suppliers to drastically increase its profits. By using vertical integration, Disney was able to develop a huge, profitable empire. The Walt Disney World Corporation is still one the largest, most profitable companies in this