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Chapter 6: Exercises for Simulation Participants

If you are participating in a strategy simulation exercise during the academic term, you may be instructed to complete the following exercise.

What are the pros and cons of vertical integration in the industry?

Multiple Choice

• A vertically integrated company performs value chain activities along more than one stage of the of the overall value chain.

• Vertical integration includes mergers and acquisitions.

• Companies who use vertical integration are quick to embrace technological advancements by integrating seamlessly with different parts of the value chain.

• Backward integration almost always leads to a decline in quality.