Question: In this module, we learned that firms decide vertical integration or de-integration because of the threat of opportunistic behavior of their suppliers or buyers, their
In this module, we learned that firms decide vertical integration or de-integration because of the threat of opportunistic behavior of their suppliers or buyers, their capabilities, or business flexibility. Now, can you explain how those motivations influence the firms vertical integration decision and its profitability based on each integration decision? Writing Prompt: Think about the companies making backward or forward integration. How can they make more profits through the integration? In other words, how can they increase their sales or lower their costs, using vertical integration? In 300 - 500 words, write a brief response to the following discussion question. Recently, a home delivery shaving company, Harrys Razors claimed it can sell higher quality razors at a lower price because it owned the factory that makes the razors. What conditions must hold for this assertion to be true?
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