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Understanding the Market — Entrepreneurship STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEntrepreneurshipUnderstanding the Market3 Marks
Question
Discuss vertical integrative expansion in brief.
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Answer

Vertical integration means that activities or functions previously being outsourced by the business will now be undertaken by itself.
This form can be further categorised as:
  1. Backward integration: It refers to taking a step back in the value added chain towards the raw material or in simple terms it can be said that a firm becomes its own supplier.
  2. Forward integration: It refers to taking a step forward on the value added chain towards the customers or in simple terms it can be said that the firm becomes its own buyer.

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