The extension of a company's activities into stages of production that absorb the company's outputs is known as ________.
A) forward integration
B) backward integration
C) an internalization advantage
D) an ownership advantage

Question

Quizplus · Accepted Answer

Forward integration involves a company expanding its activities into distribution or sales channels that allow for the absorption of the company's outputs. This can be a beneficial strategy for companies looking to gain more control over their supply chain and capture more value from their products or services. Backward integration involves a company expanding into the production stages that come before its current operations. An internalization advantage and ownership advantage are related to a company's ability to compete in international markets and are not directly related to production integration.

The Extension of a Company's Activities into Stages of Production