A firm acquiring another firm at a different level of activity within a channel of distribution is called:
A) vertical integration.
B) a tying contract.
C) dual distribution.
D) horizontal integration.
E) a regrouping activity.

Question

Quizplus · Accepted Answer

Vertical integration refers to a situation where a firm acquires another firm at a different level of activity within a channel of distribution. This can involve the firm acquiring a supplier or a distributor to gain control over the production or distribution of its products or services. Horizontal integration, on the other hand, refers to a situation where a firm acquires another firm that operates at the same level of the channel of distribution. Tying contracts involve a situation where a firm requires a customer to purchase one product or service in order to purchase another product or service. Dual distribution involves a situation where a manufacturer uses two or more different channels to reach the same market. Finally, regrouping activity is not a recognized term in the context of distribution channels or integration.

A Firm Acquiring Another Firm at a Different Level of Activity