In vertical integration, forward integration occurs when a firm
A) attempts to achieve economies of scope.
B) controls the customers for its main products.
C) owns or controls the inputs it uses.
D) generates sustainable cost savings.

Question

Quizplus · Accepted Answer

Forward integration occurs when a company controls the customers for its main products. This means that the company seeks to integrate forward into the distribution channel. This strategy is often used to secure outlets for the company's products and to ensure that the company can maintain control over the marketing and distribution of those products. While the other choices may also be reasons for vertical integration, they do not specifically describe forward integration.

In Vertical Integration, Forward Integration Occurs When a Firm