Question

2. The client, a shoe making company, is losing money due to a rival. There's also a proceeding against your client. The rival company is thinking of merging with/acquiring your client's company. Look at the extract of a contract between the client and the steel supplier and advise your client of the pros and cons regarding the proceeding ?​

Answer 1

Explanation:

Vertical integration and expansion is desired because it secures supplies needed by the firm to produce its product and the market needed to sell the product. Vertical integration and expansion can become undesirable when its actions become anti-competitive and impede free competition in an open marketplace. Vertical integration is one method of avoiding the hold-up problem. A monopoly produced through vertical integration is called a vertical monopoly.