Which of the following is NOT a strategic disadvantage of vertical integration?
A. Vertical integration boosts a firm's capital investment in the industry, thus increasing business risk if the industry becomes unattractive later.
B. Vertical integration backward into parts and components manufacturing can impair a company's operating flexibility when it comes to changing out the use of certain parts and components.
C. Vertical integration reduces the opportunity for achieving greater product differentiation.
D. Forward or backward integration often calls for radically different skills and business capabilities than the firm possesses.
E. Vertical integration poses all kinds of capacity-matching problems.
Answer: Vertical integration reduces the opportunity for achieving greater product differentiation.