Question

If Under Armour buys a shoe factory in China, explain the way that vertical integration benefits the consumer?

Answer 1

If under Armour(which is an American company) buys a shoe factory in China are then the benefits bof vertical integration to the consumer will be -

• Due to vertical integration , the per unit cost of goods decreases. So cutting the cost of the product lead which benefits the consumers as they will receive the goods at lower cost
• Vertical integration benefit is that it expands the business geographically which ease the consumers to buy the products at any where that too at lower price because many cost are decreased such as transportation cost