Conglomerate integration
Conglomerate integration (or diversification) occurs when a firm expands into industries completely unrelated to its current business. The acquired firm operates in a different market with different products and customers, diversifying the firm's portfolio.
Real World
Berkshire Hathaway, originally a textile company, owns GEICO insurance, Dairy Queen restaurants, and Duracell batteries — spreading risk across entirely unrelated industries.
Exam Focus
Distinguish conglomerate from horizontal integration by stressing the firms operate in unrelated markets with no operational synergies.
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