In some cases, backward vertical integration can increase efficiency byMultiple choice question.improving the competitive position of existing suppliers in the value chain.giving a company proprietary knowledge that is expensive to keep from rivals.coordinating production flows and preventing bottlenecks.allowing a company to outsource activities that are too costly to perform in-house.
Question
In some cases, backward vertical integration can increase efficiency byMultiple choice question.improving the competitive position of existing suppliers in the value chain.giving a company proprietary knowledge that is expensive to keep from rivals.coordinating production flows and preventing bottlenecks.allowing a company to outsource activities that are too costly to perform in-house.
Solution
The correct answer is: coordinating production flows and preventing bottlenecks.
Backward vertical integration refers to a company's strategy of gaining ownership or increased control over its previous suppliers. This can increase efficiency by allowing the company to better coordinate its production flows and prevent bottlenecks. This is because the company now has more control over the supply of the raw materials or components it needs for its products, which can help ensure a steady and timely supply. This can reduce delays in the production process and help the company better meet its customers' demands.
Similar Questions
Why do some firms choose alternatives to vertical integration?Multiple choice question.to control every stage in the industry value chainto avoid the risks associated with vertical integrationto avoid strict financial regulationsto avoid the risks associated with diversification
Select all that applyThe benefits of forward vertical integration includeMultiple select question.giving manufacturers better access to end users.increasing a company's internal costs.differentiating a company from its competitors.improving a company's market visibility.
Which statement about entering the supply stage of the value chain as part of a vertical integration strategy is true?Multiple choice question.Matching a supplier's production efficiency often requires significant investment in research and development.Companies that enter the supply stage of the value chain are likely to face few difficulties keeping pace with changes in technology.Most companies that enter the supply stage of the value chain have greater production capacity than existing suppliers.Matching a supplier's production efficiency is among the least challenging obstacles to backward integration.
A firm with a vertical integration strategy that seeks full integrationMultiple choice question.adopts a vertical integration strategy that begins aggressively but slows down over time.starts up operations in discrete stages of the value-chain system.participates in all stages of the industry value-chain system.combines in-house and outsourced activity in any given stage of the value chain system.
Which of the following is NOT an advantage for a firm of vertical integration? Reduced uncertainty The ability to erect entry barriers Economies of scale A greater range of products
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