26 Outline one advantage and one disadvantage of conglomerate integration.

[sarah_naeem]

[KN]: One advantage of conglomerate integration is that it helps the business spread risk across different industries.
[APP]: For example, if a clothing brand merges with a perfume brand it would reduces the chances of the business to fail as if one business falls the company would still be able to recover from the other business as it is now earning from two industries.
[AN]: Thus, this leads to expansion of business, increase in revenue and improved brand image
[AN+]:This further leads to customer loyalty and long term success of business.

[KN]: One disadvantage is that the business may lack expertise.
[APP]: For example, if a shoes company like Nike merges with a completely new industry like a skincare products company it may be difficult for them to understand the customer demands and they may not have many experienced employees in that industry.
[AN]: Thus, this would lead to poor management and wrong decision making which would worsen the brand image and lead to reduced customers as the customers no longer trust the business.
[AN+]: This further leads to decrease in sales and revenue which further weakens the financial stability of the brand leading to early failure of business.