Study notes

Conglomerate Integration

  • Levels: AS, A Level, IB
  • Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC

The nature of and examples of conglomerate integration as a form of external business growth is covered in this short revision video.

Conglomerate Integration

Lateral / Conglomerate Integration

There are some notable businesses that have built up a large number of different subsidiaries often with limited commercial relationships

Lateral integration happens when companies join together that produce similar but related products. Examples:

Google and You Tube

Proctor & Gamble acquiring Gillette

Microsoft's takeover of Skype (2011)

SSL International, the manufacturer of Durex condoms, taken over by conglomerate Reckitt Benckiser (2010)

One of the main advantages of lateral integration is to exploit economies of scope

Conglomerates

A conglomerate has a large number of diversified businesses. Tata Group is one of the world's most diversified businesses and a great example of a conglomerate. Another is Samsung – the electronics giant also makes military hardware, apartments, ships and Samsung also operates a Korean amusement park! Google is best described as a digital conglomerate.

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