Which term describes growth by acquiring or merging with a firm closer to the customer in the supply chain?

• A. conglomerates
• B. backward vertical integration
• C. horizontal integration
• D. forward vertical integration

Answer: (D)

Forward vertical integration describes growth by acquiring or merging with a firm closer to the customer in the supply chain. By moving downstream, the company gains control over activities that touch the end user, such as distributors or retailers, which can improve market access, pricing power, and the flow of information from customers. This is different from backward vertical integration (moving toward suppliers upstream), horizontal integration (expanding by acquiring a firm at the same stage of the supply chain), and conglomerates (diversifying into unrelated businesses). An example is a manufacturer buying a retail chain to sell directly to customers.