Which is seen in the example below: horizontal integration, vertical integration, low-cost strategy, global strategy, diversification strategy?PepsiCo purchased KFC so it could replace Coke...

Which is seen in the example below: horizontal integration, vertical integration, low-cost strategy, global strategy, diversification strategy?

PepsiCo purchased KFC so it could replace Coke products with Pepsi products in KFC restaurants. This is an example of which strategy?

Asked on by italiagirl

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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In my opinion, this is an example of vertical integration.

Vertical integration happens when a company buys up certain kinds of other companies.  Specifically, it is when a company buys up companies that supply it with things that it needs or that buy the product it makes.  For example, if a car company buys a glass company, that is vertical integration because every car needs lots of glass.  In this case, Pepsi is going buy KFC because KFC is a company that will buy Pepsi's products.

So vertical integration is where you buy companies that go up and down the supply chain.  This is clearly an example of that.

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