Vertical integration is a business strategy in which a company purchases its ____________ suppliers.

Question

Quizplus · Accepted Answer

Vertical integration refers to a company buying its upstream suppliers, i.e., the suppliers that provide raw materials, components, or services required for production. By doing so, the company gains greater control over its supply chain, reduces dependency on external suppliers, and may even benefit from economies of scale. Acquiring downstream suppliers refers to taking control of distribution channels and customers, which is known as horizontal integration. Internal suppliers refer to departments or units within the company that provide goods or services to other units. "Most useful" is subjective and not a relevant criterion for choice.

Vertical Integration Is a Business Strategy in Which a Company