Question

Define convergent and divergent lateral combination

Answer 1

Lateral Combination: It refers to the integration of business units producing and selling different but allied products. The lateral combination may be either convergent or divergent. Convergent lateral combination arises when firms producing different products but supplying to a common user join with him.

I HOPE YOU WILL UNDERSTAND THE ANSWER!!!

Answer 2

Convergent Lateral combination

Convergent lateral combination implies a combination of different industrial units whose finished product is the raw material for one major firm. In other words, the finished goods of many units is the raw material of one unit. For e.g. all the component manufacturers of a particular automobile joining together or all the component manufacturers of a computer joining together, a paper producer, ink producer and printing blocks producer joining to set up a printing press.

Divergent Lateral combination

In the case of divergent combination, the different combining units get their raw materials from a major finti. The product of one firm becomes the raw material of the other firms which have combined with it. For e.g. Both HP (Hewlett Packard) and Compaq which were buying computer chips from Intel have merged together.

hope it helps you