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When the business men combine their business units on the basis of nature of work, it is called type of combination. Following are the main types of combination
Where the different business units of similar nature, producing similar products join together under some single management, it is called horizontal combination. Horizontal combination is the voluntarily association of two or mare than two business units, producing similar products, having same level of production and serving same geographical market.
• Two or more than two cement factories may combine together to achieve some common objective.
• If two or more than two sugar firms, which are at the same level of production, serving the same geographical market join together to form a combination it is an example of horizontal combination.
The business units engaged in successive stage of production or sales can combine their business, it means one product is made at different stages of production by different firms such combination is called vertical, sequence, process of industry combination.
The diagonal or service combination takes place when a main business combines with different firms, which supply helping goods or services for making the final products. Circular combination is also called a mixed combination. It is a merger of firms producing altogether entirely different products under the banner of central agency.
Where the different business units of similar nature, producing similar products join together under some single management, it is called horizontal combination. Horizontal combination is the voluntarily association of two or mare than two business units, producing similar products, having same level of production and serving same geographical market.
• Two or more than two cement factories may combine together to achieve some common objective.
• If two or more than two sugar firms, which are at the same level of production, serving the same geographical market join together to form a combination it is an example of horizontal combination.
The business units engaged in successive stage of production or sales can combine their business, it means one product is made at different stages of production by different firms such combination is called vertical, sequence, process of industry combination.
The diagonal or service combination takes place when a main business combines with different firms, which supply helping goods or services for making the final products. Circular combination is also called a mixed combination. It is a merger of firms producing altogether entirely different products under the banner of central agency.
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