What is a significant advantage of forward vertical integration?

A significant advantage of forward vertical integration is greater control over product supply. This approach allows a company to take ownership of the distribution channels or retailing aspects of its business. By integrating forward, a company can ensure that its products are more readily available to consumers and can manage how much product is made available and at what price. This control leads to a more streamlined operation, allowing the business to respond to market demands more effectively.

Having greater control over product supply can also enhance brand loyalty, as customers may prefer a consistent and known source for their products. Moreover, it can lead to improved profit margins because the company can eliminate intermediaries that typically take a share of the profits.

In contrast, options such as access to new customer bases might be relevant in specific contexts but do not directly reflect the primary advantage of forward vertical integration. Lower production costs are often associated with backward integration, where a company owns its supply chain to reduce costs. Increased supplier costs contradict the nature of vertical integration, as the goal is to streamline operations and potentially reduce overall costs related to the supply chain.