Which statement best describes one of the new business models that emerged during the Second Industrial Revolution
One of the new business models that emerged during the Second Industrial Revolution was the concept of vertical integration. Vertical integration refers to a business strategy in which a company controls and operates multiple stages of the production process within its industry. This means that a company would not only produce the final product but also own and control the necessary resources, raw materials, and distribution channels involved in its production.
By vertically integrating, companies aimed to increase efficiency, reduce costs, and gain a competitive advantage over their rivals. For example, in the steel industry, companies such as Andrew Carnegie’s U.S. Steel vertically integrated by acquiring iron ore mines, coal mines, transportation networks, and steel mills. This allowed them to have complete control over the production process, from the extraction of raw materials to the final production of steel products.
Vertical integration provided companies with greater control over their supply chain, ensuring a steady supply of resources and reducing dependence on external suppliers. It also facilitated coordination and communication between different stages of production, leading to streamlined operations and increased economies of scale. Additionally, vertical integration enabled companies to eliminate intermediaries and capture a larger share of the profits.
However, it is important to note that vertical integration was not the only business model that emerged during the Second Industrial Revolution. Other significant developments included the rise of large corporations, the expansion of mass production and assembly line techniques, the establishment of trusts and monopolies, and the emergence of new financing mechanisms, such as stock markets and investment banking. These various business models and strategies collectively transformed the economic landscape during this period.