Asked by Smitty Hendrix on Jun 20, 2024
Verified
Which of the following is not a condition that favours the success of vertical integration?
A) availability of capital
B) availability of managerial talent
C) required demand
D) small market share
E) the ability to operate an acquired vendor
Vertical Integration
An approach in which a business grows by extending into various stages along its production chain, including instances where a producer controls its own supply and distribution networks.
Availability Of Capital
The degree to which funds are accessible for investing in business activities or projects, often influenced by market conditions and interest rates.
Market Share
The portion of a market controlled by a particular company or product, usually expressed as a percentage of total sales in that market.
- Gain insight into the different components of supply chain management, specifically environmental risks and tactics for integration.
Verified Answer
MP
makenzie prattJun 24, 2024
Final Answer :
D
Explanation :
Vertical integration is beneficial when a company has a large market share, and it wants to reduce costs, improve quality and gain control over the supply chain. However, if a company has a small market share, it may not have the resources or economies of scale to support vertical integration efforts. Therefore, small market share is not a condition that favours the success of vertical integration. Availability of capital, managerial talent, required demand and the ability to operate an acquired vendor are favorable conditions for successful vertical integration.
Learning Objectives
- Gain insight into the different components of supply chain management, specifically environmental risks and tactics for integration.