Question

Soapsuds Inc., a manufacturer of cleaning agents, supplies its products to All Needs Inc., a supermarket chain. It demands that All Needs create more shelf space in its stores for Soapsuds' products. However, All Needs Inc. refuses to do this. Instead, it decides to produce its own range of cleaning agents with its own label "All Wash." In this scenario, All Needs Inc. has exercised its bargaining power as a buyer through _____.

A) forward integration
B) product differentiation
C) backward integration
D) crowdsourcing

Answer 1

C) backward integration

Step-by-step explanation:

It seems that All Needs Inc. has exercised its bargaining power as a buyer through backward integration. This term refers to a process undertaken by a company where they purchase subsidiaries or internally creates inputs needed for their production. Which the latter seems to be the case in this scenario since Soapsud Inc. is producing their own range of cleaning agent in order to progress their supply chain.