Neon Electronics Inc.sourced touchscreens required for its tablet computers, cell phones, and televisions from a manufacturer in China.But the demand for such components was high globally, and the supplier could not meet the quality standards of Neon Electronics.Thus, Neon Electronics decided to set up its own unit to develop and manufacture the required touchscreens.What does this scenario best illustrate?
A) Crowdsourcing
B) New product development
C) Backward vertical integration
D) Conglomerate diversification

Question

Quizplus · Accepted Answer

This scenario best illustrates backward vertical integration. Backward vertical integration involves moving ownership of activities upstream nearer to the originating inputs of the industry value chain.