Question

As soon as United Parcel Service (UPS) moved into overnight delivery, FedEx's strong point, FedEx bought trucking and ground shipping assets to gain advantage over UPS's strong point. These activities between UPS and FedEx are referred to as:
a. market power.
b. economies of scope.
c. vertical integration
d. multipoint competition or horizontal intergration

Answer 1

As soon as United Parcel Service (UPS) moved into overnight delivery, FedEx's strong point, FedEx bought trucking and ground shipping assets to gain advantage over UPS's strong point. These activities between UPS and FedEx are referred to as :

d. multipoint competition or horizontal intergration

Explanation:

• Multipoint competition refers to situations in which firms meet the same rivals in many markets, which may lead to a reduction of competitive pressure.
• Multipoint competition adds complexity to decisions about whether to respond to a rival's moves.
• With multipoint competition , a firm faces the same rival in more than one market.If rivals are able to establish mutual forbearance, then multipoint competition can help them be successful.
• Multipoint competition describes a context in which firms engage in competitive interactions simultaneously across multiple products or markets, so that competitive actions in a given market may lead to responses in a different market or across multiple markets
• Horizontal integration is the merger of two or more companies that occupy similar levels in the production supply chain.
• The process is also known as lateral integration and is the opposite of vertical integration whereby companies that are at different stages in the production supply chain merge