Vertical integration can be risky when demand is unpredictable because it is hard to manage the volume or flow of products along the value-added chain.

Question

Quizplus · Accepted Answer

Vertical integration involves owning and controlling multiple stages of the value-added chain, from raw materials to finished products. When demand is unpredictable, it can be difficult to manage the volume or flow of products along the chain, leading to inefficiencies and higher costs. Therefore, vertical integration can be risky in such situations.

Vertical Integration Can Be Risky When Demand Is Unpredictable Because