The two best reasons for investing company resources in vertical integration (either forward or backward) are to:
A. expand into foreign markets and/or control more of the industry value chain.
B. broaden the firm's product line and/or avoid the need for outsourcing.
C. gain a first-mover advantage over rivals in revamping the industry value chain.
D. add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability.
E. achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain a greater ability to reduce internal operating costs.
Answer: add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability.