Question

Vertical integration is more likely to be attractive when the end customer market is

Answer 1

Vertical integration is often attractive in smaller economies with limited international trade, where economies of scale are small relative to demand, and where competition is less intense, allowing firms more control over their supply chain and brand reputation.

Step-by-step explanation:

Vertical integration is more likely to be attractive when the end customer market exhibits specific characteristics. Generally, vertical integration is not principally about competing on price, service or quality. Instead, it is about businesses taking control of the supply chain to gain certain advantages.

For example, vertical integration might be more attractive in a market where:

• International trade limitations restrict the benefit from comparative advantage and slicing up the value chain.
• There are economies of scale that are small in comparison to the market demand, hence integration can help in managing costs effectively.
• Firms face less competitive pressure within their smaller economies, which reduces the urgency to provide goods on the terms consumers ideally want.

Moreover, companies with well-respected brand names that have been built over many years might prefer vertical integration to protect their brand equity and maintain control over the quality and distribution of their products.

Answer 2

the goal of vertical integration is typical to increase sales eliminate coast and improve profits by improving business operations backward vertical integration can reduce or eliminate the leverage that suppliers have over the film and why doing to reduce