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Vertical Diversification

Strategic Management

Sir, does backward vertical diversification means acquiring a new business line ( company) or starting a new business line? In the example you have stated, a car manufacturing company acquires the business of tire manufacturing company. My doubt is whether a car manufacturing company acquires the business line or starts its own tire manufacturing company.

Rithani R.C

CA Inter

★ 4K+

04-Mar-21 22:01

320

Answers (1)

Backward integration is when a company buys another company that supplies the products or services needed for production. Car making company acquires company making tyres