The primary disadvantage of vertical integration is:
A) decreased product quality.
B) loss of control over inputs.
C) increased bureaucratic costs.
D) increased number of opportunistic suppliers.

Question

Quizplus · Accepted Answer

Vertical integration involves expanding a company's operations into different stages of the value chain, such as production or distribution. While it can provide benefits like increased control over quality and reduced transaction costs, it also leads to increased bureaucratic costs. This is because the company now has to manage more stages of the value chain, which requires additional resources and personnel. Consequently, this choice is the primary disadvantage of vertical integration.

The Primary Disadvantage of Vertical Integration Is