Soapsuds Inc., a manufacturer of cleaning agents, supplies its products to All Needs Inc., a supermarket chain. It demands that All Needs create more shelf space in its stores for Soapsuds' products. However, All Needs Inc. refuses to do this. Instead, it decides to produce its own range of cleaning agents with its own label "All Wash." In this scenario, All Needs Inc. has exercised its bargaining power as a buyer through forward integration product differentiation crowdsourcing backward integration

Question

Kaylen Lawrence

Business

12 December, 06:37

Soapsuds Inc., a manufacturer of cleaning agents, supplies its products to All Needs Inc., a supermarket chain. It demands that All Needs create more shelf space in its stores for Soapsuds' products. However, All Needs Inc. refuses to do this. Instead, it decides to produce its own range of cleaning agents with its own label "All Wash." In this scenario, All Needs Inc. has exercised its bargaining power as a buyer through forward integration product differentiation crowdsourcing backward integration

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Selina Aguirre · Answer 1

Backward Integration

Explanation:

What All Needs Inc. did by producing its own Soap with label "All wash" instead of Soapsuds's product is called Backward integration.

Backward integration refers to the process of vertical integration in which a company enlarges its role to fulfill tasks that are formerly completed by businesses in the supply chain. In other words, Backward integration is when a company buys another company that supplies the products or company decide to establish a subsidiary to perform tasks of producing something it use to get from a supplier chain. Backward chain is a known competitive strategy. It can also mean buying part of the supply chain that occurs prior to the company's manufacturing process