Question on: JAMB Commerce - 2014
The coming together of a manufacturing business with a firm that markets its products is
A
backward integration
B
a consortium
C
forward integration
D
a syndicate
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Correct Option: C
The correct answer is forward integration.
- Forward integration occurs when a company expands its operations by acquiring or merging with a business that is closer to the end-user or consumer. In this scenario, a manufacturing business merging with a marketing firm is an example of moving "forward" in the supply chain, towards the consumer.
- Backward integration would be the opposite (e.g., a manufacturing business acquiring a supplier of raw materials).
- A consortium is a group of companies that come together to achieve a common goal, often a large project.
- A syndicate is a group of individuals or organizations combined to promote some common interest.
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