To the extent that other firms may have competitive advantages in business activities that a firm is considering to enter through vertical integration, vertically integrating into these activities could put the firm at a
A) competitive advantage.
B) temporary dynamic disadvantage.
C) sustainable competitive advantage.
D) competitive disadvantage.

Question

Quizplus · Accepted Answer

If other firms have competitive advantages in the business activities that a firm is considering to enter through vertical integration, it could put the firm at a competitive disadvantage. This is because the other firms are better positioned to perform those activities and may be able to offer them at a lower cost or with better quality. As a result, the vertically integrated firm may struggle to compete and may not be able to generate the expected benefits from the integration.

To the Extent That Other Firms May Have Competitive Advantages