Vertical integration is based on a company entering only those industries that:
A) are involved in the distribution of products.
B) are considered as potential competitors.
C) are involved in sourcing raw materials.
D) are not in any way related to the company's current business operation.
E) add value to its core products.

Question

Quizplus · Accepted Answer

Vertical integration refers to a company owning and operating multiple stages of the production process, from raw material extraction to distribution. The purpose of vertical integration is to add value to the core products. Therefore, the choice that best represents the purpose of vertical integration is E, which states that a company should only enter industries that add value to its core products.

Vertical Integration Is Based on a Company Entering Only Those