Which sentence shows that the company is using backward integration?

Ryan heads a cell phone manufacturing company. After (seeing the growing

market demand for cell phones, Ryan decides to open retail outlets to sell cell phones.) He gains the advantage of being able to sell the cell phones at a cheaper rate compared to his competitors. On the other hand, Louis manages a sugar factory. After being in the manufacturing industry for five years, he decides to expand the business to achieve greater profits. (Louis ventures into the field of growing sugarcane to have good quality raw materials for his sugar factory, and have less dependence on the suppliers.)

Question

Business

Madisyn Short

27 April, 11:13

Which sentence shows that the company is using backward integration?

Ryan heads a cell phone manufacturing company. After (seeing the growing

market demand for cell phones, Ryan decides to open retail outlets to sell cell phones.) He gains the advantage of being able to sell the cell phones at a cheaper rate compared to his competitors. On the other hand, Louis manages a sugar factory. After being in the manufacturing industry for five years, he decides to expand the business to achieve greater profits. (Louis ventures into the field of growing sugarcane to have good quality raw materials for his sugar factory, and have less dependence on the suppliers.)

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Answers (2)

Know the Answer?

Camren Barnett · Answer 1

Answer: Louis ventures into the field of growing sugarcane to have good quality raw materials for his sugar factory and have less dependence on the suppliers

Explanation:

If Louis Buys his own raw materials for his sugar factory he would not have to pay more to a supplier when it would be cheaper to have ypur own

Mason Lawson · Answer 2

Louis ventures into the field of growing sugarcane to have good quality raw materials for his sugar factory, and have less dependence on the suppliers.

Explanation:

Backward integration is the process in which an organization acquires a company that supplies the raw material that it uses to manufacture its products. This is a type of vertical integration that allows an organization to guarantee the availability of the raw material it needs.

According to this, the sentence that shows that the company is using backward integration is: Louis ventures into the field of growing sugarcane to have good quality raw materials for his sugar factory, and have less dependence on the suppliers as he got into this to produce the raw material he needs to produce sugar.