Answer:
When technology in an industry is changing rapidly, a company pursuing a strategy of vertical integration may find itself:
E. increasing returns on its assets.
Vertical integration is a strategy whereby a company owns or controls its suppliers, distributors, or retail locations to control its value or supply chain that could generate more revenue.
Explanation:
In microeconomics and management, vertical integration is an arrangement in which the supply chain of a company is owned by that company. Usually each member of the supply chain produces a different product or market-specific service, and the products combine to satisfy a common need.
A vertically integrated business model means that you consolidate multiple steps in the typical distribution process. Instead of operating solely as a manufacturer, distributor or retailer, a vertically integrated company performs tasks commonly carried out by suppliers or trade buyers.
Vertical integration potentially reduces transportation costs if common ownership results in closer geographic proximity, improves supply chain coordination and provides more opportunities to differentiate by means of increased control over inputs.
Vertical integration as a strategy, allows a company to reduce costs across various parts of production, ensures tighter quality control, ensures a better flow and control of information across the supply chain, improves data accessibility which becomes easier for people in organizations, improves productivity and enables robust growth increasing return on assets.
