Question

Fortress International, a large conglomerate, procures a few component parts from external suppliers and also manufactures some of the key raw materials in its own subsidiaries. Aside from this, the company does not solely depend on outside distributors to reach its customers. In fact, it has its own retail stores to distribute its products. In this scenario, which of the following alternatives to vertical integration is Fortress International applying?

a. horizontal integration
b. taper integration
c. joint venture
d. equity alliance

Answer 1

B. Taper Integration.

Step-by-step explanation:

This is a form of partial integration as it is not a vertical integration.

Generally, tapered integration always allows you to preserve the threat of manufacturing key items yourself without full commitment to the process. You only manufacture a part of the total components needed and outsource the rest. If your internal manufacturing operation can be easily expanded, you'll put more teeth in any threats made toward uncooperative suppliers.