Vertical Merger Direction in Supply Chain

Steps:

• Identify the acquiring firm as a clothing manufacturer, which produces goods.
• Note the target as a clothing retailer, which sells goods to consumers.
• Recall vertical mergers integrate supply chain stages: backward toward suppliers, forward toward customers.
• Classify this as forward, since the manufacturer moves downstream to control distribution.

Why C is correct:

• Forward vertical merger occurs when a producer acquires a distributor to secure sales channels, as defined in business integration strategies.

Why the others are wrong:

• A: Backward vertical involves acquiring upstream suppliers, like a retailer buying a manufacturer.
• B: Conglomerate merges unrelated industries, not sequential supply chain firms.
• D: Horizontal merges competitors at the same level, like two manufacturers.

Final answer: C