Vertical Merger in Supply Chain Expansion

Steps:

• Identify the firms: a clothing manufacturer (produces goods) acquires a clothing retailer (sells to consumers).
• Analyze the supply chain direction: manufacturer moves forward to the distribution/sales stage.
• Recall merger types: vertical mergers involve different stages; forward goes downstream, backward upstream.
• Classify: this downstream acquisition fits forward vertical merger.

Why C is correct:

• Forward vertical merger occurs when a company acquires a buyer or distributor in the next supply chain stage, as defined in business integration strategies.

Why the others are wrong:

• A: Backward vertical involves acquiring a supplier or upstream firm, not a downstream retailer.
• B: Conglomerate merger combines unrelated businesses, like clothing with unrelated industries.
• D: Horizontal merger joins competitors at the same production level, such as two manufacturers.

Final answer: C