What is the term for primary businesses starting or acquiring another primary business?

Prepare for NCEA Level 2 Business Studies Test. Study comprehensively with flashcards and varied question formats, each offering hints and detailed explanations. Ready yourself for success!

The correct term for primary businesses starting or acquiring another primary business is horizontal integration. This concept refers to the process where a company expands its operations by acquiring or merging with another company that operates at the same level in the supply chain or industry. By doing so, businesses aim to increase their market share, reduce competition, and gain access to new customer bases or resources.

This strategy is often seen in industries where companies seek to consolidate their position or increase efficiency by controlling more of the market. It contrasts with vertical integration, which involves acquiring businesses at different stages of the supply chain, such as suppliers or distributors.

In the context of this question, horizontal integration is specifically focused on primary businesses, which are typically involved in the extraction or agriculture sectors. This is why the choice of horizontal integration as the correct answer is particularly apt.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy