The possibility of diversification is a driver of vertical integration strategies.

Question

Quizplus · Accepted Answer

Vertical integration enables firms to have greater control over the production process and reduce dependency on suppliers, which can lead to diversification of their product offerings. By having control over multiple stages of the value chain, firms can enter into new markets and expand their business. Therefore, the possibility of diversification can be a driver of vertical integration strategies.

The Possibility of Diversification Is a Driver of Vertical Integration