CVS's recent merger with Caremark, a large pharmaceutical benefits manager broadens CVS's business from retail into health care management. This strategy is __________ and allows CVS to gain __________.
A) unrelated diversification; operational relatedness
B) related diversification; financial economies
C) forward vertical integration; market power
D) virtual integration; market power

Question

Quizplus · Accepted Answer

The merger with Caremark represents forward vertical integration as CVS expands its operations into a different stage of the same production path, allowing it to gain market power in the health care management sector.

CVS's Recent Merger with Caremark, a Large Pharmaceutical Benefits Manager