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Ch 3 - Size of business, Conglomerate - Coggle Diagram

- - - - Rationalisation may bring bad publicity and redundancies.
      - May be customer opposition to less competition and less choice.
      - May lead to a monopoly investigation if the combined business exceeds certain market share limits.
    - - It eliminates one competitor and increases market share and power.
      - Potential economies of scale.
      - Scope for rationalising production, concentrating all output on 1 site as opposed to 2.
      - May be increased power over suppliers to obtain lower prices.
    - - Consumers now have less choice and may have to pay higher prices.
      - Workers may lose job security as a result of rationalisation.
  - - - It gives control over quality, price and delivery times of supplies.
      - It encourages joint research and development into improved quality of components.
      - The business may now control supplies of materials to competitors.
    - - Business may lack experience of managing a supplying company - a successful steel producer will not necessarily make a good manager of a coal mine.
      - The supplying business may become complacent due to having a guaranteed customer.
    - - Workers may have more career opportunities.
      - Consumers may obtain improved quality and more innovative products.
      - Control over supplies to competitors may limit competition and choice for consumers.
      - Profit might rise to benefit shareholders.
  - - - Consumers may suspect an attempt to act uncompetitively and react negatively.
      - The business may lack experience in this sector of industry - a successful manufacturer doesn't necessarily make a good retailer.
    - - It gives a secure outlet for the products of the business and may not exclude competitors' products from retail outlets.
      - The business is now able to control the promotion and pricing of its own products.
    - - Maybe more varied career opportunities.
      - Workers may have greater job security because the business has secure outlets.
      - Consumers may resent the lack of competition in the retail outlet because of the withdrawal of competitor products.