For Backward Vertical Integration into the Business of Suppliers to Be

question 101

Multiple Choice

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company

• A)must first be a proficient manufacturer.
• B)must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality.
• C)must have excess production capacity so that it has an ample in-house ability to undertake additional production activities.
• D)needs to have a wide product line, so it can supply parts and components for many products.
• E)should have a distinctive competence in production process technology and at least a core competence in manufacturing R&D.

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Definitions:

Political Unrest

A state of disagreement or conflict within a country due to differing opinions on governance, policy, or leadership.

Risk Insurance

A financial product that provides a safeguard against potential losses or damages, transferring the risk from an individual or entity to an insurance provider.

Deregulating

The reduction or elimination of government power in a particular industry, usually to create more competition and increase efficiency.

Centralizing

The process of concentrating control and decision-making authority in a central location or group within an organization or system.