U.S. car makers were forced to build their own network of dealerships to enter the Japanese market.
A)This is an example of backward vertical integration.
B)This is an example of forward vertical integration.
C)This is an example of sideways vertical integration.
D)None of the above

Question

Quizplus · Accepted Answer

Forward vertical integration is when a company moves closer to the end consumer by acquiring or establishing distribution channels, such as building their own network of dealerships. In this case, U.S. car makers had to enter the Japanese market and build their own dealerships, which is an example of forward vertical integration. Backward vertical integration would be if U.S. car makers decided to acquire suppliers of raw materials or components, while sideways vertical integration would be if U.S. car makers acquired or merged with competitors at the same level of the supply chain.

US Car Makers Were Forced to Build Their Own Network