Question

WillowWorks LLC, a retail clothing store, has been sourcing its raw materials from a supplier named ThreadTym Corp. for the last five years. A change of management at ThreadTym resulted in an increase of the prices of the raw materials. As a result, WillowWorks purchases ThreadTym so that it can produce these products on its own. This scenario best illustrates ________.

Answer 1

Answer: backward integration

Step-by-step explanation:

Backward integration refers to a scenario whereby a company purchases another company which supplies the products that are required for production.

Since WillowWorks purchases ThreadTym so that it can produce these products on its own, then this is backward integration.