Which of the following is not a rationale for vertical integration?
A) the strategic importance of the activity has increased
B) the relative competence of the firm to perform the activity has decreased
C) uncertainty regarding demand (volume) has increased
D) none of the above

Question

Quizplus · Accepted Answer

Vertical integration is pursued when a company wants to increase its control over its supply chain, reduce dependency on suppliers, or enter into adjacent stages of production to capture more value. It is typically motivated by the strategic importance of an activity, the desire to control uncertainty, or to leverage competencies. A decrease in the relative competence of the firm to perform the activity would not be a rationale for vertical integration; instead, it might lead a firm to outsource that activity.

Which of the Following Is Not a Rationale for Vertical