Which term means a single company operating in more than one segment of the value chain to generate more profits?

• A. Value/Supply Chain
• B. Benification
• C. Vertical integration
• D. Sorting Rough

Answer: (C)

Vertical integration is the idea that a single company operates across multiple stages of the value chain, from raw material extraction to final product distribution. By controlling several steps, the firm can cut transaction costs, align incentives, and capture more of the value created at each stage, which often boosts profits. In diamonds, this might mean a company mining rough, sorting or valuing it, cutting and polishing, and selling the finished stones itself. This broad control over the process is what drives higher profitability compared to firms that specialize in only one part of the chain.

The other terms don’t describe this ownership and control across multiple stages. The value/supply chain is the overall sequence of activities, not a specific strategy of one company spanning several steps. Beneficiation refers to improving ore value through processing, not the corporate practice of operating in multiple segments. Sorting rough is just a processing step, not a description of a company’s structure or strategy.