CONGLOMERATE INTEGRATION

Question 1

What is conglomorate intergration

Answer 1

Conglomerate integration: When an organisation grows through diversifying into industries unrelated to their existing product portfolio.

Virgin is a good example of this - Virgin money and Virgin airlines - These have very little similarities.

Question 2

What is lateral intergration

Answer 2

Lateral integration: When an organisation grows through diversifying into industries related to their existing product portfolio.

An example of this would be Google and Youtube - They aren’t the same industry, but they are related as they both need to entertain

Question 3

What are the advantages of conglomerate intergration

Answer 3

Diversifies the compnay’s risk over a ranfe of unrelated markets

Managment expertise and brand image in one field can be applicable in another

Brands can develop a loyal following making customers more willing to try new products