When the long-term strategy of a firm is based on growth through the acquisition of one or more similar businesses operating at the same stage of the production-marketing chain,this is called:
A) Vertical integration
B) Conglomeration
C) Horizontal acquisition
D) Liquidation

Question

Quizplus · Accepted Answer

Horizontal acquisition refers to the acquisition of similar businesses operating at the same stage of the production-marketing chain. This allows the firm to expand its market share, increase its economies of scale, and reduce competition. Vertical integration, on the other hand, refers to the acquisition of businesses that operate at different stages of the production-marketing chain. Conglomeration refers to the acquisition of businesses in unrelated industries, and liquidation refers to the sale of all assets and the closure of the business.

When the Long-Term Strategy of a Firm Is Based on Growth