A jewelry manufacturer has recently acquired the mining company that supplies the precious metals used in its jewelry production.
What is this an example of?
Backward vertical integration occurs when a company acquires a supplier or producer that is further upstream in the supply chain. In contrast, forward vertical integration happens when a company buys a retailer or distributor further downstream.
Note: Forward horizontal and backward horizontal integration do not exist---these are trick options. (See LO 1.2, p.42)
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