Most companies begin with a centralized organizational model and gradually move towards a decentralized model. As some companies grow, they will acquire others in an effort to streamline operations and become more efficient. One result of these acquisitions is integration. Which of the following is an example of an integration type other than vertical integration?
A) A factory that produces paint acquires a factory that produces dyes.
B) A frozen pizza manufacturer acquires a factory that produces pizza sauce.
C) A peanut butter producer buys a factory that manufactures jelly.
D) An automobile manufacturer purchases a factory that produces tires.

Question

Quizplus · Accepted Answer

This question requires familiarity with integration, specifically vertical. A vertical type of integration involves a company acquiring another company that exists within the same value chain. Choice C is the only choice listed that accurately depicts a situation where a company is buying another company that is not within the same value chain, resulting in a different kind of merger. The other choices are examples of vertical integration.

Most Companies Begin with a Centralized Organizational Model and Gradually