45. In order to reduce production costs, Seuss Inc., an automobile manufacturer, decided to buy out a glass plant and begin manufacturing the glass for the windows of cars on its own. The corporate strategy adopted by the company is known as A. concentration. B. vertical integration. C. related diversification. D. unrelated diversification.

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Business

Myles Shah

18 July, 23:41

45. In order to reduce production costs, Seuss Inc., an automobile manufacturer, decided to buy out a glass plant and begin manufacturing the glass for the windows of cars on its own. The corporate strategy adopted by the company is known as A. concentration. B. vertical integration. C. related diversification. D. unrelated diversification.

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Alexus · Answer 1

B.

Explanation:

Vertical integration is a merger of companies at different stages of production and/or distribution in the same industry. A strategy that many companies use to gain control over their industry's value chain. This strategy is one of the major considerations when developing corporate level strategy.

The important question in corporate strategy is, whether the company should participate in one activity (one industry) or many activities (many industries) along the industry value chain.

For example, the company has to decide if it only manufactures its products or would engage in retailing and after sales services as well.