In the context of competitive markets, which two alternatives to vertical integration are commonly considered?

• A. Price discrimination and bundling
• B. Outsourcing and strategic alliances
• C. Monopolization and deregulation
• D. Collusion and market segmentation

Answer: (B)

Verified step by step guidance

1. Understand the concept of vertical integration: it occurs when a company controls multiple stages of production or distribution within the same industry.
2. Identify alternatives to vertical integration, which are strategies firms use to achieve similar benefits without owning all stages of production.
3. Recognize that outsourcing involves contracting out certain business processes or production stages to external firms, allowing specialization and cost savings.
4. Understand that strategic alliances are partnerships between firms to collaborate on certain activities while remaining independent, sharing resources or capabilities.
5. Conclude that among the given options, outsourcing and strategic alliances are the two common alternatives to vertical integration in competitive markets.