Question below:
Pure Leather LLC, which manufactures leather bags and belts, is planning to adopt an Vertical Integration Strategy. By purchasing a leather cleaning and tanning plant, Pure Leather LLC could control the quantity, cost, and quality of the product's raw materials. Likewise, Pure Leather LLC Company could control the distribution of the company's products by purchasing a fleet of delivery trucks. The present supplier though is providing very good quality of raw material at reasonable cost. Demand for these leather goods is going down as more and more people are talking about animal protection. A company must have expertise in each step of the production and distribution process in order to maximize the advantages of such integration. Pure Leather LLC Company will have to learn how to clean, tan and polish leather as well as it knows how to manufacture leather products like bags and belts.
Question:
Identify the two integration strategies the firm could adopt. By purchasing a leather cleaning and tanning plant, which strategy out of these two you think will the firm adopt? Taking the information given into consideration, do you suggest the firm to adopt an Integration Strategy? Justify your answer.