Vertical expansion refers to the growth of a business or organization by increasing its operations within the same supply chain. This can involve acquiring or merging with suppliers or distributors, allowing the company to control more of the production process. By doing so, businesses can improve efficiency, reduce costs, and enhance their market position. This strategy contrasts with horizontal expansion, where a company seeks to grow by acquiring or merging with competitors. Vertical expansion can lead to greater market power and stability, as it allows a company to manage its resources and supply chain more effectively, ultimately benefiting its overall performance and profitability.