Practicing Success

Target Exam

CUET

Subject

Entrepreneurship

Chapter

Enterprise growth Strategies

Question:
"This is a merger which takes place between two business organizations that deal in products that are related to each other and operate in the same market. This merger allows the merging companies to group together their products and get access to a bigger set of consumers. This ensures that they earn higher profits." Which of the following type of merger is being discussed here?
Options:
Vertical merger
Horizontal merger
market extension merger
product extension merger
Correct Answer:
product extension merger
Explanation:
Product extension mergers: A product extension merger takes place between two business organizations that deal in products that are related to each other and operate in the same market. The product extension merger allows the merging companies to group together their products and get access to a bigger set of consumers. This ensures that they earn higher profits.