integration

Question 1

advantage of integration (百搭）

Answer 1

enjoy economies of scale
better utilization of resources
take advantage of the existing brand name to other products
(benefit derived from the brand name) (dsepp)

Question 2

explanation of conglomerate expansion

Answer 2

the firm has expanded into unrelated industires

Question 3

motives of conglomerate expansion

Answer 3

to have product diversification so as to spread risk
to make use of its brand name of one product in other products
to enjoy economies of scale
to use resources more efficiently as the two companies can share some of their resources.

Question 4

motives of vertical forward integration

Answer 4

to secure outlet of product
easier to obtain information on consumers’ preference
to enjoy economies of scale

Question 5

motives of lateral expansion

Answer 5

enjoy economies of scale
spread risk by business diversification
better utilisation of resources
benefits derived from brand name

Question 6

motives of horizontal expansion

Answer 6

to enjoy economies of scale
greater market power
reduce duplication of facilities

Question 7

ocean park open hotel

what expansion

Answer 7

lateral
related but not competitive
both provide services to tourist

Question 8

travel company build hotel

what expansion

Answer 8

vertical backward
as the hotel is factor of production of the travel company service

to secure the supply of factor inputs

Question 9

a japanese cosmetic products to sell both Japanese korean cosmetic products

what expansion

Answer 9

horizontal…

because they are in competition