Which is vertical integration and which is diversification? a) diversification b

Question

Which is vertical integration and which is diversification?

a) diversification b) vertical integration

- Delta Airlines buys Trainer, a fuel refinery

- Hershey Chocolate buys Krave Beef Jerkey

- Operating simultaneously in multiple industries or markets

- The focus firm incorporates additional steps of its value chains into its company boundaries

- Google, a company first known for an internet search engine, buys Slide, a third-party Facebook app developer

- Dunkin' Brands, owner of Dunkin' Donuts, buys Baskin-Robbins Ice Cream. - Hilo's Seafood Restaurant in Hawaii purchases a local fishing company

Explanation / Answer

Diversification means expansion to new avenues of business and market

Vertical integration means expansion to upstream or downstream operations in the same business

- Delta Airlines buys Trainer, a fuel refinery: Vertical integration as fuel is required for airlines

- Hershey Chocolate buys Krave Beef Jerkey: Diversification as it a new business from chocolate to beef

- Operating simultaneously in multiple industries or markets: Diversification as operating in multiple markets

- The focus firm incorporates additional steps of its value chains into its company boundaries: Vertical integration as firm takes steps to expand into company boundaries

- Google, a company first known for an internet search engine, buys Slide, a third-party Facebook app developer: Diversification as it is the new area

- Dunkin' Brands, owner of Dunkin' Donuts, buys Baskin-Robbins Ice Cream. - Hilo's Seafood Restaurant in Hawaii purchases a local fishing company: Diversification as it is the new area of market

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