The bargaining power of suppliers may prompt backward vertical integration.

Name: The bargaining power of suppliers may prompt backward vertical integration.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If suppliers have a strong bargaining power, they may demand higher prices or better terms from their customers, which can increase the costs for the company. In response, the company may choose to integrate backward and start producing its own inputs to reduce its dependence on suppliers and gain more control over its supply chain.

The Bargaining Power of Suppliers May Prompt Backward Vertical Integration