In order to reduce production costs, Seuss Inc., an automobile manufacturer, decided to buy out a glass plant and begin manufacturing the glass for the windows of cars on its own. The corporate strategy adopted by the company is known as
A) concentration.
B) vertical integration.
C) related diversification.
D) unrelated diversification.
E) differentiation.

Question

Quizplus · Accepted Answer

Vertical integration involves acquiring a company that operates in a different stage of the same supply chain for the purpose of controlling costs, improving efficiency, and gaining a competitive advantage. In this case, Seuss Inc. has acquired a glass plant to bring the production of glass for its cars in-house, which is an example of vertical integration.

In Order to Reduce Production Costs, Seuss Inc