Question

Condax Electronics relied on a large chain of consumer electronics stores to sell its tablet computers, cell phones, and televisions and also to provide customer service and technical support. However, that retailer outsourced its service departments, and customers began to complain that they could not get reliable tech support for Condax products. In response, Condax Electronics decided to set up its own tech support department, and it also began to investigate opening its own brand-based retail stores. What does this scenario best illustrate?

A. Forward vertical integration

B. New product development

C. Conglomerate diversification

D. crowdsourcing

Answer 1

In the given case, Condax Electronics is a manufacturer of consumer electronics items. It sells these items through large chain of consumer electronic stores.

However, now, it wants to open its own brand based retail stores and has also decided to set up its own tech support department.

These two steps are downstream through the supply chain of Condax Electronics.

When a firm enages in activites that are downstream through its supply chain then firm is said to be engaging in forward vertical integration.

Hence, the correct answer is the option (A) [Forward vertical integration].