Question:
Which of the following is the best example of forward vertical integration?
A) a car dealership opening up its own automobile manufacturing plant
B) a car company opening its own dealerships to sell its products directly to customers
C) a car company opening its own chain of video rental stores
D) a car company opening a plant to product motorcycles
Forward vertical integration
Vertical integration is a type of diversification strategy where the firm is trying to get into new businesses. Beyond a certain point, the firm cannot expand its basic product market. Here the firm reached a 'saturation point' where developing new products and thus increasing the sales will become a necessity for organizations. This strategy towards growth is known as diversification.
Answer and Explanation:
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The answer here is option "B", a car company opening its own dealerships to sell its products directly to customers.
Option B is a perfect...
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