Question

how did Carnegie used vertical integration to reduce competition and make his business more profitable

Answer 1

When a company practices vertical integration, it buys up businesses that aren't directly related to its product -- stores, trucking, suppliers, etc.. That means it can potentially control the means to supply itself with raw material as well as sell the products it creates.

It would be as if Apple bought out Best Buy instead of putting a store inside in order to sell its products. By doing that, it can then block others from selling products inside Best Buy now that it owns it. They could tell Dell, Samsung, and Toshiba to pound salt with their laptops and prevent them from selling those in their stores, ending competition there.

That's essentially that Carnegie did, but he focused on suppliers. By owning many of the businesses that supplied the raw materials needed to make his steel, he could limit his competitors by starving them of the same thing or by raising prices on their needs as opposed to his (because he controlled the suppliers, materials could be sold to his steel plants at dirt cheap prices).

Answer 2

thank you. I figured it out but your explanation made this so much clearer. @Captain_Page_Turner