let us discuss below Integrations and acquisitions happen in the business world all the time. For the companies partaking in this action, it often is because there is going to be some sort of benefit for them in their industry. As for integration, there are two types in which companies partake in. The first one is vertical integration. This is when two companies who are in the business of making the same product at different stages merge together and become one company. This is often beneficial because the two separate parts in the production process become streamlined through one source of management. Another way this becomes beneficial is with reduced cost. As a company in the second line of production, there is going to be a profit margin that has to be paid to the previous producer. Being one company this profit margin becomes nonexistent. A disadvantage of this is the significant investment requirements that come with acquiring a new part of a company.

The next way to integrate companies is with horizontal integration. This happens when two companies competing in the same industry at the same stage of production merge together. The benefits of this are a larger market share and a bigger base of customers. The two companies are fighting for the same sales but when joining together pull all their sales together and have a larger portion of the market than any of the competition. The downfall of this is it is seen as a way to create a monopoly within an industry. Any integration like this often faces its fair share of scrutiny from the public as well as the government who creates laws to keep big companies from ruining economies with massive mergers.

Finally, the last way to merge two companies is with a conglomerate merger. This happens when two firms that are involved in two totally different industries are merged together to become one company. This is beneficial because firms are able to access a new pool of customers that were previously unreachable in the industry they were in which creates company growth. Another reason this is positive is that if a company has a poor-performing quarter the other end of the company can pick up the slack. There are many benefits but one of the negatives that it can cause is the distraction of resources to portions of the business that have performed well in the past. Moving resources from these parts of the business could lead to a decrease in profit.

If two companies conglomerate merged and had two completely separate business models which company would have to change their business model the most? Can you think of any industries that would have to change more than others?

The benefits and risks of vertical integration - ANCA - CNC machines. ANCA. (n.d.). Retrieved April 13, 2023, from https://machines.anca.com/News/Technology/The-benefits-and-risks-of-vertical-integration

Kenton, W. (2022, November 7). Conglomerate mergers: Definition, purposes, and examples. Investopedia. Retrieved April 13, 2023, from https://www.investopedia.com/terms/c/conlgomeratemerger.asp