Which of the following is not a strategic disadvantage of vertical integration? Vertical integration poses all...
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Which of the following is not a strategic disadvantage of vertical integration? Vertical integration poses all kinds of capacity-matching problems (achieving the most efficient scale of operation for a part/component may require a larger/smaller production volume than the company needs to supply its own internal needs/requirements). Vertical integration boosts a firm's capital investment in the industry, thus increasing business risk if the industry becomes unattractive later. Vertical integration backward into parts and components manufacture can impair a company's flexibility to accommodate a cheaper/better product design or a product line adjustment that eliminates use of parts and components that are made in-house. Vertical integration reduces a company's ability to deal directly with the buyers of its products or services. Integrating forward or backward often calls for skills and business capabilities that the firm does not possess and/or may not be able to master easily. Which of the following is not a strategic disadvantage of vertical integration? Vertical integration poses all kinds of capacity-matching problems (achieving the most efficient scale of operation for a part/component may require a larger/smaller production volume than the company needs to supply its own internal needs/requirements). Vertical integration boosts a firm's capital investment in the industry, thus increasing business risk if the industry becomes unattractive later. Vertical integration backward into parts and components manufacture can impair a company's flexibility to accommodate a cheaper/better product design or a product line adjustment that eliminates use of parts and components that are made in-house. Vertical integration reduces a company's ability to deal directly with the buyers of its products or services. Integrating forward or backward often calls for skills and business capabilities that the firm does not possess and/or may not be able to master easily.
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Related Book For
Managerial Accounting A Focus on Ethical Decision Making
ISBN: 978-0324663853
5th edition
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins
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