ECONOMICS
ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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vertical integration has a number of different businesses involved
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commodity chain has one company controlling all levels of production
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commodity chains have a number of different businesses involved
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vertical integration has one company controlling all levels of production
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Detailed explanation-1: -Horizontal integration is when a business grows by acquiring a similar company in their industry at the same point of the supply chain. Vertical integration is when a business expands by acquiring another company that operates before or after them in the supply chain.
Detailed explanation-2: -Vertical integration requires a company’s direct ownership of suppliers, distributors, or retail locations to obtain greater control of its supply chain. The advantages can include greater efficiencies, reduced costs, and more control along the manufacturing or distribution process.
Detailed explanation-3: -In vertical integration, a single firm controls two or more successive stages of vertical coordination. In ver-tically integrated firms, management directives dictate the transfer of resources across stages.
Detailed explanation-4: -There are three varieties of vertical integration: backward (upstream) vertical integration, forward (downstream) vertical integration, and balanced (both upstream and downstream) vertical integration.