Question

Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of creating value by usinga. using related diversification to achieve value by integrating vertically in order to acquire market powerb. using related diversification to achieve value by pooling negotiating power to achieve market powerc. using related diversification to achieve value by leveraging core competencies to achieve economies of scoped. using related diversification to achieve value by integrating vertically in order to attain economies of scope

Answer 1

Answer:

Using related diversification to achieve value by integrating vertically in order to acquire market power.

Explanation:

First, let's understand what are the stages of a supply chain, they are:

1. commodities
2. manufacturing
3. distribution
4. retail

In this regard, we can see that Shaw Industries controls more than one stage of its supply, commodities and manufacturing chain, which characterizes vertical integration.

Therefore, the most appropriate alternative to the question is that the company gains a greater market gain with this strategy because it increases the management and quality control, by ensuring that the inputs and processes are in accordance with its standards, which guarantees a product of higher quality and consequently better positioned on the market.