A Strategy of Vertical Integration Can Have Substantial Drawbacks, Including

question 25

Multiple Choice

A strategy of vertical integration can have substantial drawbacks, including

• A)whether horizontal integration can limit the performance of strategy-critical activities in ways that increase cost, build expertise, protect proprietary know-how, or increase differentiation.
• B)raising the firm's capital investment in the industry and increasing business risk, as well as providing less flexibility in accommodating shifting buyer preferences by locking the firm into relying on its own in-house activities.
• C)the environmental costs of coordinating operations across vertical chain activities.
• D)loss of technological know-how.
• E)the difficulties faced in entering outside vertical and horizontal markets.

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Definitions:

Contingency Fund

A reserve of money set aside to cover unexpected costs or financial shortfalls during a project.

Organization Type

Categorizes an entity based on its purpose, structure, and operations, such as non-profit, corporation, or government entity.

Time Horizons

The timeframe within which objectives are planned to be achieved or events are expected to occur, influencing decision-making processes.

Milestone Schedule

A project management tool that outlines significant events or achievements along a project timeline.