The CEO of an express delivery service company is contemplating an entry into truck manufacturing through an acquisition. What would you suggest to the CEO? and why? Do vertically integrate. It gives you access to critical resources. Do vertically integrate. It promises monopoly control over your competitors. Do not integrate. Express delivery and truck manufacturing are businesses that require very different competencies. Do not integrate. The transactions costs of buying trucks in the market are greater than the administrative costs of making trucks within the firm.

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
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The CEO of an express delivery service company is contemplating an entry into truck manufacturing through an acquisition.

What would you suggest to the CEO? and why?

Do vertically integrate. It gives you access to critical resources.
Do vertically integrate. It promises monopoly control over your competitors.
Do not integrate. Express delivery and truck manufacturing are businesses that require very different competencies.
Do not integrate. The transactions costs of buying trucks in the market are greater than the administrative costs of making trucks within the firm.
 
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