Conglomerate integration

Question 1

What has a conglomerate acquired?

Answer 1

A large number of diversified businesses

Question 2

Give two examples of clonglomerates?

Answer 2

Tata Group
Samsung

Question 3

Give four specific benefits of conglomerate integration?

Answer 3

• Spreads risk, less vulnerable to losses in one area
• Spreads ideas
• Cross subsidisation
• The company may have access cash but not enough opportunities to grow in its existing market.

Question 4

Give three specific drawback of conglomerate integration?

Answer 4

A company is taking over another company without having any experience about the industry

Question 5

What is the impact of a company taking over another company with very little experience about the market that they are entering?

Answer 5

There are chances of mismanagement
Marketing and pricing errors could be made if the company does not fully understand the market which it is entering.