Question

The merger of Luxottica with Oakley, Ray-Ban, Sunglass Hut, and Lens Crafters is an example of a:

A) Downwards merger
B) Lateral merger
C) Vertical merger
D) Merged merger

Answer 1

The Luxottica merger with various eyewear brands such as Oakley and Ray-Ban is an example of a vertical merger, aiming to consolidate different production stages and secure the supply chain.

Step-by-step explanation:

The merger of Luxottica with Oakley, Ray-Ban, Sunglass Hut, and LensCrafters is an example of a vertical merger. A vertical merger involves companies at different stages of production merging together. The purpose of such a merger is often to streamline the manufacturing process and protect the companies involved from the loss of suppliers or other types of supply chain disruptions. In contrast, a horizontal merger occurs between companies that produce similar products, and a lateral merger typically involves two firms of similar size combining to increase their market share or to acquire new product lines.