Delta Airlines announced that it was purchasing a refinery for $150 million and that it would spend an additional $100 million to upgrade the facility.Jet fuel is a major expense for airlines and Delta hoped that this would allow it to control costs.In this example, Delta is using which of the following strategies?
A)Unrelated diversification
B)Product development
C)Market penetration
D)Backward vertical integration
E)Related diversification

Question

Quizplus · Accepted Answer

Delta Airlines is pursuing backward vertical integration by purchasing a refinery. This allows them to control their supply chain and potentially reduce costs for a major expense, jet fuel.

Delta Airlines Announced That It Was Purchasing a Refinery for $150