Vertical integration is defined as:
A)A firm's ownership of vertically integrated activities
B)A firm's ownership of horizontally integrated activities
C)A firm's involvement in a narrow range of products which it makes entirely in-house.
D)A firm with many decentralized decision centers

Question

Quizplus · Accepted Answer

Vertical integration refers to a company's ownership or control of activities that are part of its supply chain, either upstream towards suppliers or downstream towards customers. This can involve ownership of production processes, raw materials, distribution channels, and even retail outlets. Therefore, option A is the correct definition. Option B refers to horizontal integration, which involves a company expanding its operations through acquiring or merging with other companies that operate in the same industry or market. Option C is an incorrect definition as it refers to a narrow product line and not ownership of different stages of a supply chain. Option D is unrelated to the concept of vertical integration.

Vertical Integration Is Defined As