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What are three types of opportunities for sharing that form a sound basis for diversification or...

What are three types of opportunities for sharing that form a sound basis for diversification or vertical integration? Give an example of each from companies you have read about.

(So far I have backward integration and forward integration. Can't think of a third)

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Answer #1

What are three types of opportunities for sharing that form a sound basis for diversification or vertical integration? Give an example of each from companies you have read about.

  • To increase the market share
    • ?Often companies face lack of market share of their existing products after a while
    • Hence they chose diversification to venture into new areas and increase the product base
  • To Minimize the risk
    • ?When company expands its business, the risk is distributed to broader level
    • Thus this reduces risk on one product
  • backward integration and forward integration
    • ?It helps in making a company self sufficient in terms of raw materials
    • It eliminates suppliers cost
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