Which of the following problems is (are)associated with a strategy of vertical integration?
A) An increasing cost structure
B) Manufacturing disadvantages that arise because of rapidly changing technology
C) Marketing disadvantages that arise when demand is unpredictable
D) All of these
E) None of these

Question

Quizplus · Accepted Answer

Vertical integration, which involves owning and controlling multiple stages of a supply chain, can lead to an increasing cost structure due to the high capital investment required for acquiring and integrating new stages. This can also result in manufacturing disadvantages when new technology emerges more rapidly than can be implemented. Additionally, it can create marketing disadvantages when demand is unpredictable, leaving the company with excess inventory or underutilized production capacity. Therefore, all of these problems are associated with a strategy of vertical integration.

Which of the Following Problems Is (Are)associated with a Strategy