If suppliers are unreliable or too costly, which of these strategies may be appropriate?

When suppliers are unreliable or too costly, one effective strategy is backward integration. This strategy involves a company taking control of its supply chain by acquiring or merging with suppliers. By doing so, the firm can ensure a consistent supply of materials and components, reduce reliance on external vendors, and potentially lower costs.

Implementing backward integration allows a business to oversee production processes more directly, which can enhance quality and efficiency. When a company becomes its own supplier, it can also forge stronger relationships with key production inputs, gaining greater control over prices and availability, and reducing the risk of supply chain disruptions.

This approach can be especially valuable in industries where reliable access to materials is critical for maintaining production schedules and fulfilling customer demand. In contrast, other strategies listed may not effectively address the core issue of supplier reliability. Horizontal integration focuses on expansion within the same industry but does not solve supplier problems. Market penetration seeks to increase market share for existing products, while concentric diversification involves adding new products or services that are related to current offerings, neither of which directly address the challenges posed by unreliable or costly suppliers.