Why might a company pursue forward integration?

A company might pursue forward integration primarily to control its distribution channels and enhance product availability. This strategy involves expanding into the next stages of the supply chain, allowing the company to take direct control of the processes involved in bringing its products to market. By doing so, the organization can ensure that its products are readily available to consumers, potentially reducing lead times and improving customer satisfaction. It also helps the company to gain better insights into consumer preferences and demand patterns, which can inform future product development and marketing strategies.

Moreover, controlling the distribution channels can lead to cost savings and increased profit margins since the company is less reliant on third-party distributors who may impose their own terms and pricing. This strategy can also provide the competitive advantage of exclusivity, whereby the company can maintain better oversight of how its products are marketed and sold, thereby enhancing brand value.

The other options present different business strategies that do not specifically relate to the primary objectives of forward integration. For example, introducing new product lines pertains more to diversification than forward integration. Similarly, reducing competition is more a factor of competitive strategy rather than an objective behind forward integration itself. Lastly, eliminating unprofitable business units relates to restructuring and operational efficiency rather than expanding control over distribution and sales.