What is backward integration in supply chain management?

Backward integration in supply chain management refers to a strategy where a company takes control over its supply chain by acquiring or merging with its suppliers. This approach allows the company to ensure a steady supply of raw materials, reduce dependence on external suppliers, and potentially lower costs associated with procurement. By buying a supplier, a company can enhance its production capabilities, improve quality control, and gain a competitive advantage through increased efficiency.

In contrast, the other choices describe different supply chain actions. Selling products to retailers pertains to distribution rather than integration. Outsourcing production involves delegating manufacturing tasks to third parties rather than bringing those operations in-house. Changing a marketing strategy is unrelated to supply chain processes as it focuses on customer engagement and brand positioning instead of supply chain dynamics.