Th3.1: Conglomerate Integration Advantages

Question 1

What is conglomerate integration?

Answer 1

where firms in different industries with no obvious connections integrate

Question 2

What are the three advantages of conglomerate integration?

Answer 2

no room for growth in present market
reduces the risk
easier for each individual part

Question 3

No room for growth in present market

Answer 3

it is useful for firms when there may be no room for growth in their present market

Question 4

Reduces the risk

Answer 4

the range of products reduces the risk for firms as if a whole industry fails, they will still survive due to the other parts of the business

Question 5

Easier for each individual part

Answer 5

it will make it easier for each individual part of the business to expand than if they were on their own as finance can be easily obtained and managers can be transferred from company to company within the firm