Question

Which of these strategies is effective when the number of suppliers is small and the number of competitors is large? 1. Conglomerate diversification 2. Forward integration 3. Backward integration 4. Horizontal diversification

Answer 1

Answer:

(4) Horizontal Diversification strategies is effective when the number of suppliers is small and the number of competitors is large.

Explanation:

• The need for increased market share has led to horizontal diversification kind of tendencies.
• The object is to introduce unrelated products post-acquisition thus gaining product differentiation. This strategy is highly preferred owing to less riskiness.
• For example, in 2012 Facebook acquired Instagram both of which function on similar lines yet Facebook innovated Instagram by adding new functionalities.
• This kind of merger creates monopolistic tendencies by eliminating competitors.

To know more:

Diversification strategies:

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Answer 2

Answer:1

Explanation: