Question

If Dell computers were to open its own factory to manufacture the LCD televisions it sells at its online store, this would be an example of:

A) forward vertical integration.
B) product differentiation.
C) forward horizontal integration.
D) backward vertical integration.

Answer 1

The correct answer is letter "D": backward vertical integration.

Step-by-step explanation:

Integration occurs when one company owns another in its supply chain. If a company owns a supplier or expands its activities within the same supply chain to cover other sectors, this is backward integration. Companies will use backward integration if cost savings, improved performance or guaranteed supply lead.