Question

Virtue Products Inc., a large conglomerate, procures a few component parts from external suppliers and also manufactures some of the key raw materials in its own subsidiaries. This apart, the company does not solely depend on outside distributors to reach its customers. In fact, it has its own retail stores to distribute its products. In this scenario, which of the following alternatives to vertical integration is Virtue Products applying?A) Horizontal integrationB) Concentric integrationC) Taper integrationD) Conglomerate integration

Answer 1

Answer:

C) Taper integration

Explanation:

Taper integration refers to a combination of vertical integration and market exchange. In this case the company is vertically integrating both its upstream and downstream operations.

Upstream operations refers to suppliers, and the company is producing some of the supplies that it needs.

Downstream operations refers to distribution channels, and the company is selling its products directly to final customers.