Effects of integration

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

Last modified: Wednesday, 20 June 2012, 11:25 AM