Horti-Business Management (2+0)

Effects of integration

Vertical integration

• More profits by taking up additional functions
• Risk reduction through improved market co-ordination
• Improvement in bargaining power and the prospects of influencing prices
• Lowering costs through achieving operational efficiency
Horizontal integration

• Buying out a competitor in a time bound way to reduce competition
• Gaining larger share of the market and higher profits
• Attaining economies of scale
• Specializing in the trade
Conglomeration

• Risk reduction through diversification
• Acquisition of financial leverage
• Empire – building urge