ITPEC IP October 2025 Question 79
ITPEC IP October 2025 — Question 79 of 100
A trading company acquiring a retailer is vertical integration — the buyer brings a downstream sales channel in the same value chain under common control.
The trading company purchases products overseas, while the retailer sells them to end customers. Making the retailer a subsidiary connects successive distribution stages and can improve coordination, margins, market access, and control over sales.
Answer (b)
Why not others:
- (a) is outsourcing a function to a partner rather than integrating ownership
- (c) combines competitors at the same banking stage, so it is horizontal integration
- (d) describes widespread dependence on common suppliers or a platform, not corporate integration
Key rule: Vertical integration joins different upstream or downstream stages of one value chain; horizontal integration joins firms at the same stage.
AI-generated — may contain errors
The original exam layout is preserved in the image so diagrams, formulas, tables, and code remain accurate.
This question comes from an official ITPEC past paper. ITPEC Practice is an independent study tool and is not affiliated with ITPEC. See the official IP past-paper collection or Report an issue.