Vertical merger:
Forward vertical merger:
Assured outlet for products
Profit made by retailer is absorbed by manufacturer
Prevent retailer from selling products of other businesses
Market research on customers transferred directly to the manufacturer
Backward vertical merger:
Constant supply of raw materials
Profit from primary sector business is absorbed by manufacturer
Prevent supplier from supplying other businesses
Controlled cost of raw materials
Conglomerate merger:
Spreads risks
Transfer of new ideas from one section of the business to another
Why some businesses stay small?