Vertical coordination may increase the risk to consumer's and supplier's ________ (e.g.,those expenditures tailored to a particular company and value chain partner).
A) logistics channel
B) independent operations
C) specific investments
D) leverage ability
E) liquidity situation

Question

Quizplus · Accepted Answer

Specific investments refer to expenditures that are made to fit a particular company and value chain partner. When firms engage in vertical coordination, they may have to make these types of specific investments, which can be risky for both the consumer and supplier if the relationship falls apart or if the invested resources cannot be easily used with a different partner.

Vertical Coordination May Increase the Risk to Consumer's and Supplier's