A business grows by taking over a supplier of its raw materials. This type of integration is best described as:

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Question

A business grows by taking over a supplier of its raw materials. This type of integration is best described as:

Accepted Answer

Vertical backward integration — Vertical backward integration occurs when a business merges with or takes over a firm at an earlier stage of the same production chain, such as a supplier of raw materials. Option A (conglomerate) involves merging with an unrelated business. Option B (horizontal) involves merging with a competitor at the same stage. Option C (lateral) is not a standard Cambridge IGCSE term for this type of integration.

Answer

Horizontal integration

Answer

Lateral integration

Answer

Conglomerate integration

Answer

Vertical backward integration

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