Answer :
True. The above scenario is an example of backward integration.
What is meant by backward integration?
Backward integration is a type of vertical integration where a company takes on responsibilities that were previously handled by companies higher up the supply chain. In other words, backward integration occurs when a business acquires a supplier of goods or services for its own operations.
What makes backward integration crucial?
Backward integration, a type of vertical integration, enables companies to gain control over suppliers and boost the effectiveness of their supply chains. In order to obtain a competitive advantage over rival companies and cut costs, businesses often merge with or purchase their suppliers.
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