Vertical integration occurs when a company:

A Merges with a competitor

B Expands into supply chain stages either upstream (suppliers) or downstream (distribution)

C Enters unrelated industries

D Reduces headcount

✓ Correct Answer: Option B

Vertical integration: forward (toward customer — e.g., manufacturer opens retail stores) or backward (toward supplier — e.g., retailer acquires manufacturer). Increases control but reduces flexibility.

💡 Why is B) the correct answer?

The correct answer to the question "Vertical integration occurs when a company:" is Option B: Expands into supply chain stages either upstream (suppliers) or downstream (distribution).

The other options — A) Merges with a competitor, C) Enters unrelated industries, D) Reduces headcount — are incorrect for this Pre-MBA Exam Prep question. As explained above: Vertical integration: forward (toward customer — e.g., manufacturer opens retail stores) or backward (toward supplier — e.g., retailer acquires manufacturer). Increases control but reduces flexibilit…

📚 About This Pre-MBA Exam Prep Practice Question

This 2-level Pre-MBA Exam Prep question from the Strategy topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free Pre-MBA Exam Prep practice test or use flashcards for spaced repetition review.

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Vertical integration occurs when a company:

✓ Correct Answer: Option B

📚 About This Pre-MBA Exam Prep Practice Question

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