A manufacturer establishing its own retail outlets in order to be closer to the final customer exemplifies:
A) forward integration.
B) related diversification.
C) backward integration.
D) unrelated diversification.

Question

Quizplus · Accepted Answer

Forward integration refers to a strategy where a company expands its operations by acquiring or establishing its own distribution channels or retail outlets in order to be closer to the final customer. By doing this, the company can have more control over its supply chain, ensure that its products are displayed and promoted in the right way, and also capture a larger share of the profits that would have otherwise gone to intermediaries. Therefore, establishing its own retail outlets is an example of forward integration.

A Manufacturer Establishing Its Own Retail Outlets in Order to Be