22 Analyse advantages for a car manufacturer of backward vertical integration.

[Sir Afzal Shad]

22 Analyse two advantages for a car manufacturer of backward vertical integration.[8]
Hint: Buys a supplier, e.g., a tyre company > This guarantees the supply of tyres > Prevents production delays and gives control over quality.

[Aarib Saad]

(KN)It will help with quality control.
(APP)For instance, if a car manufacturer takes over a tire manufacturer, it will ensure that the tires remain durable and reliable.
(AN)Thus, this will ensure that the business is able to have consistent quality, meeting the expectations of customers, which improve brand image, leading customer retention for the long run.

[shamaim shakeel]

[KN] Backward vertical integration happens when a business buys or merges with one of its suppliers. This helps the business gain more control over its supply chain and reduce costs.
[APP] For example, a car manufacturer might buy a tyre company to make sure it always has enough tyres for its vehicles.
[AN] This guarantees a steady supply of tyres, prevents production delays, and gives better control over quality, helping the business operate more efficiently and increase profit.

[EmmanWaseem]

It is buying of a supplier
For example, they buy tyres from the supplier so it is in a better quality
Ensures that they get the right thing un higher quality

[Fatima ibtehaj]

[KN]The business gains a larger share of the market by combining with a competitor, giving it more power to set prices and influence customers.
[APP]For example, if Toyota buys a steel supplier, it can guarantee a constant flow of steel for its factories.
[AN]This helps maintain production efficiency and consistent car quality leading towards a rise in brand image leading towards a larger consumer base and lower economies of scale.

[Arham Qadri]

[KN] Help the quality control.
[APP] For example a car manufacturer also takes control over the tyer manufacturer, so he will keep sure that the tyer remains reliable.
[AN] This will ensure that the business will have good quality which will be meeting the demands of customers hence improving the businesses/brands image.

[Aayan Zaidi]

KN: Backward vertical integration is when a business takes control of its suppliers to get raw materials or parts directly.
APP: E.g a car manufacturer buying a tyre or steel company ensures steady supply of materials.
AN: This helps lower costs, improve quality control, and reduce dependence on outside suppliers.

[Hajra]

K: Backward vertical integration means when a business takes over or merges with a supplier.
App: For example, a car manufacturer might buy a company that makes car parts.
An: This helps the business lower production costs, have better control over quality, and avoid supply delays.

[Abdullah Altaf]

[KN] Backward vertical integration will help car manufacturer use good quality tyres.
[APP] For instance, if a car manufacturer acquires a tire manufacturing company, they can directly control the production process and ensure that only high-quality tires are used in their vehicles. This eliminates reliance on external suppliers and allows for consistent quality control.
[AN] This ensures a consistent supply of high-quality tires, improving vehicle safety, performance, and customer satisfaction. It can also lead to cost savings by eliminating issues from inconsistent tire quality and reducing repair cost.

[Abdullah Mohsin]

[KN] Cheaper raw materials
[APP] For example, Honda takes over the supplier that supplies it steel, which is the main raw material used to produce cars, decreasing the price spent on steel, decreasing the COP of the company, allowing the company to decrease prices of their vehicles.
[AN] This helps the company become more competitive as their prices would be cheaper than competitors e.g Toyota, Increasing the consumer base of the business. Horizontal intergration would also allow Honda to sustain its quality of steel, building customer trust, leading to repetitive sales, increasing customer loyalty and helping the company be more competitive.

[Abdullah Baig]

Kn
Backward vertical integration is when a business merges with or takes over a supplier earlier in its production process
App
For example, a car manufacturer might buy a tyre company to secure a steady supply of tyres which prevents production delays and supply issues while also giving the business control over input quality and costs
An
Therefore, backward vertical integration helps the manufacturer reduce risk and improve efficiency

[Mamoona Hussain]

KN: Through vertical backward integration, a car manufacturer can buy it's supplier, giving him more control over the raw materials.
APP: For example, a car manufacturer can take over the tyre supplier and improve their quality or offer a wider variety of tyres in their cars.
AN: Due to this, the quality of the final product, in this case cars, will improve which will attract more customers, improving their brand image, enabling the business to charge higher prices from the customers.
AN+: This will increase the revenue and profits generated by the business which can later be reinvested in the business to introduce new car models, add features or improve the quality of existing ones.

KN: Another advantage is that they can have economies of scale or discounts on the tyres which decreases average costs.
APP: For example, the car manufacturer will be paying less for the same tyres bought by competitors at a higher price.
AN: Due to this, they will be able to offer their cars to the customers at a lesser price than the competitors, granting the business a competitive edge, which will increase their sales, leading the business towards a higher market share.
AN+: This will help the business to dominate the market/become a market leader, ensuring the long term survival of the manufacturer.

[Abdur Rehman khan]

[KN] Backward vertical integration means the car manufacturer now controls the supplier that provides key components, such as tyres or engines.
[APP] For example, if a car company buys a tyre manufacturer, it can directly manage tyre production and take control of its raw materials.
[AN] This reduces the risk of supply disturbance helps maintain consistent car production and improves raw material's quality along with product quality as firm can set its own quality standards.
[AN+] As a result, the manufacturer avoids delays, meets customer demand on time, and builds a stronger brand reputation.

[KN] By owning its supplier, the car manufacturer takes full control of its supply chain reducing the need to pay supplier profit margins.
[APP] For instance, instead of buying tyres from another company at market prices, it can produce them internally at a lower cost with it's own will.
[AN]This helps the business control production costs more effectively allowing better pricing strategies which ultimately improves profitability and competitiveness in the market.
[AN+] This long-term cost control strengthens the financial position and allows it to reinvest in the business which increases it's worth.

[M huzaifa jillani]

(KN)
Internal growth happens when a business expands by increasing its own sales while external growth involves merging with another food company.
(APP)
For example a local restaurant might open another branch on its own instead of merging with another food family.
(AN)
This allows the business to keep full control over decisions and operations rather than sharing ownership or management with another firm.As a result the business can grow at its own pace maintain its culture and quality standards and avoid problems like disagreement or integration issues that often occur after mergers.

[Naveen fatima]

[KN] A car manufacturer may choose to backward vertical integration to gain more control over its supply chain.
[APP] For instance, A car manufacturer company could buy a firm that produces its engines or metal parts.
[AN] This can lower the production cost since the manufacturer won’t have to rely on outside suppliers. Reduces the risk of supply delays and ensures the production runs smoothly.