Which of the following is an example of vertical integration?
A)An industrialist building new plants in a country where operation costs are low.
B)A cosmetic company collaborating with worldwide retailers to market its product.
C)A fruit juice manufacturer purchasing orchards.
D)An exporter delivering goods at a contracted price.

Question

Quizplus · Accepted Answer

Vertical integration refers to a situation when a company controls multiple stages of the production process. In this case, the purchase of orchards means that the fruit juice manufacturer is controlling its raw material source. This is an example of backward integration, which refers to a company acquiring sources of raw materials or components. Therefore, option C is the best choice. The other options do not demonstrate vertical integration.

Which of the Following Is an Example of Vertical Integration