ElectroInc,an electronics manufacturer,is considering the idea forward vertical integration.ElectroInc employees would make sales and fulfill orders in addition to manufacturing products.What is the primary risk that ElectroInc faces with vertical integration?
A) increasing performance ambiguity
B) reducing its return on investment
C) engaging in product speculation efforts
D) performing redundant channel functions
E) establishing environmental and managerial bounds

Question

Quizplus · Accepted Answer

Vertical integration can lead to reduced return on investment (ROI) due to the significant capital and operational costs associated with expanding into new stages of the supply chain.

ElectroInc,an Electronics Manufacturer,is Considering the Idea Forward Vertical Integration