Question

Which of the following is an example of vertical integration? Select one: a. purchasing competitors b. purchasing suppliers c. informally agreeing on prices d. buying stock in competing companies

Answer 1

Answer:

B. Purchasing suppliers is the correct answer.

Explanation:

The strategy by which a company controls its suppliers, retail locations and distributors to control its supply chain or value is known as vertical integration. It helps companies to control the process, make it efficient and reduce costs. Its main disadvantage is that a significant amount  of investment is required for it.  

Netflix is an example of vertical integration. It started as a DVD rental company and later shifted to original content creation. Today it uses it distribution model to promote its content alongside the films from major studios.

Answer 2

I believe the answer is B) purchasing suppliers