Question

Digipics is an assembler of digital cameras. As an assembler, Digipics' operations are limited to purchasing all of the components necessary to assemble the cameras and then selling these cameras to wholesalers who, in turn, sell them through online stores and in retail electronics stores.
If Digipics were to begin manufacturing lenses for the cameras they assembled, this wouldbe an example of:

A) backward vertical integration
B) a strategic alliance
C) forward vertical integration
D) opportunism

Answer 1

Answer:

A) Backward vertical integration.

Explanation:

In this new rapid changing environment where competitiveness is a key to success, often businesses try hard to keep the cost low, without loosing it's charms. Sometimes, it does that by doing the processes of supply chain itself that is vertical integration.

Backward Vertical Integration: It is a type of integration in which company takes the responsibility of creating the required product which is prerequisite for the final product.

• Example of Digipics: At first company used to outsource all the components including lenses as well, to make the final product, and later they started manufacturing the lenses themselves obviously to reduce cost.