question archive What is a conglomerate? How does it make money? How it is typically organized?
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What is a conglomerate? How does it make money? How it is typically organized?
Answer
conglomerate is a large company group, that operates in several industries, with different corporate units. It has one parent company, that controls the entire group of units, and try to enter in every single market with various products/services.
It makes money by selling unique products in different markets, and try to leverage profits. Conglomerate is a good strategy to divide risk and to increase the revenue from all the possible sectors.
It is typically organised as a group of firms belonging to a single corporation/company, operating as an independent units in its industry sectors. All these units are managed by the assigned management levels, and the reporting is done to the parent company for major decisions.