Question

When a buyer decides to enter its supplier's business, the strategy is referred to as _____. Group of answer choices forward horizontal integration backward vertical integration horizontal diversification backward horizontal integration forward vertical integration

Answer 1

Backward Vertical Integration

Step-by-step explanation:

There are two ways in which integration can be done vertically. When a firm extend towards the direction of the ultimate consumer, we refer to that as forward integration and when the firm extend back to it's own suppliers, we call it backward vertical integration. In this case however, the buyer decides to enter the suppliers business, thus extending back and securing supply. Therefore the scenario described indicates a backward vertical Integration.