Asked by Shiva Kumar on Jul 08, 2024
Verified
If Tyson Corporation, a firm that raises and processes chickens, combined with Kentucky Fried Chicken, the resulting merger would be an example of a
A) horizontal merger.
B) geographic merger.
C) vertical merger.
D) conglomerate merger.
Vertical Merger
A merger between two companies that operate at different stages of the production process for a specific product.
Kentucky Fried Chicken
A global fast-food restaurant chain that specializes in fried chicken, commonly known by its acronym KFC.
- Determine and distinguish between the categories of mergers: horizontal, vertical, and conglomerate.
Verified Answer
JW
Jason WoodwardJul 13, 2024
Final Answer :
C
Explanation :
A vertical merger occurs when two companies that operate at different levels within the same industry's supply chain combine operations. Tyson Corporation, which raises and processes chickens, and Kentucky Fried Chicken, a company that sells prepared chicken to consumers, operate at different levels of the supply chain in the poultry industry. Tyson is a supplier, while KFC is a retailer. Their merger would streamline operations and potentially reduce costs, fitting the definition of a vertical merger.
Learning Objectives
- Determine and distinguish between the categories of mergers: horizontal, vertical, and conglomerate.