Firms should not vertically integrate into business activities where they do not possess the resources necessary to gain competitive advantages.

Question

Quizplus · Accepted Answer

If a firm does not possess the necessary resources to gain a competitive advantage in a certain business activity, vertical integration might result in reduced efficiency and increased costs, ultimately leading to a loss of competitiveness. Therefore, it is recommended that firms only vertically integrate into activities where they can leverage their existing resources and capabilities to gain a competitive advantage.

Firms Should Not Vertically Integrate into Business Activities Where They