Which of the following best illustrates forward vertical integration?

Which of the following best illustrates forward vertical integration?

A firm that manufactured and sold car engines to major automobile companies launches its own line of cars.
A chain of ice cream parlors launches a brand of toys and accessories for children.
A multinational coffee chain sources its coffee beans from plantations in Brazil and Vietnam.
A designer shoe company that previously purchased leather from external suppliers establishes its own leather tannery.

Answer

Answer: Forward vertical integration – A firm that manufactured and sold car engines to major automobile companies launches its own line of cars.

In forward vertical integration, expansion of business activities to have the direct control of the supply or distribution and it helps in moving towards supply chain . It helps in reducing the steps involved in distribution process and also control over the pricing. Also, it offers advantage to both manufacturing organization and the customer or retailer.

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