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Alibaba Group Holding Limited, branded as Alibaba, is a Chinese multinational technology company specializing in e-commerce, retail, Internet, and technology. Founded on 28 June 1999 [1] in Hangzhou, Zhejiang, the company provides consumer-to-consumer (C2C), business-to-consumer (B2C), and business-to-business (B2B) sales services via Chinese and global marketplaces, as well as local consumer ...
Taiwan has been settled for at least 25,000 years. Ancestors of Taiwanese indigenous peoples settled the island around 6,000 years ago. In the 17th century, large-scale Han Chinese immigration began under a Dutch colony and continued under the Kingdom of Tungning, the first predominantly Han Chinese state in Taiwanese history. The island was annexed in 1683 by the Qing dynasty of China and ...
McKinsey & Company (informally McKinsey or McK) is an American multinational strategy and management consulting firm that offers professional services to corporations, governments, and other organizations. Founded in 1926 by James O. McKinsey, McKinsey is the oldest and largest of the "Big Three" management consultancies (MBB). The firm mainly focuses on the finances and operations of their ...
- United States
- International
- Advantages and Disadvantages of Conglomerates
- Media Conglomerates
- Food Conglomerates
- Bibliography
- External Links
The conglomerate fad of the 1960s
During the 1960s, the United States was caught up in a "conglomerate fad" which turned out to be a form of an economic bubble. Due to a combination of low interest rates and a repeating bear-bull market, conglomerates were able to buy smaller companies in leveraged buyouts (sometimes at temporarily deflated values). Famous examples from the 1960s include Gulf and Western Industries, Ling-Temco-Vought, ITT Corporation, Litton Industries, Textron, and Teledyne. The trick was to look for acquisi...
Genuine diversification
In other cases, conglomerates are formed for genuine interests of diversification rather than manipulation of paper return on investment. Companies with this orientation would only make acquisitions or start new branches in other sectors when they believed this would increase profitability or stability by sharing risks. Flush with cash during the 1980s, General Electric also moved into financing and financial services, which in 2005 accounted for about 45% of the company's net earnings. GE fo...
Mutual funds
With the spread of mutual funds (especially index funds since 1976), investors could more easily obtain diversification by owning a small slice of many companies in a fund rather than owning shares in a conglomerate. Another example of a successful conglomerate is Warren Buffett's Berkshire Hathaway, a holding companywhich used surplus capital from its insurance subsidiaries to invest in businesses across a variety of industries.
The end of the First World War caused a brief economic crisis in Weimar Germany, permitting entrepreneurs to buy businesses at rock-bottom prices. The most successful, Hugo Stinnes, established the most powerful private economic conglomerate in 1920s Europe – Stinnes Enterprises – which embraced sectors as diverse as manufacturing, mining, shipbuil...
Advantages
1. Diversification results in a reduction of investment risk. A downturn suffered by one subsidiary, for instance, can be counterbalanced by stability, or even expansion, in another division. For example, if Berkshire Hathaway's construction materials business has a good year, the profit might be offset by a bad year in its insurance business. This advantage is enhanced by the fact that the business cycle affects industries in different ways. Financial Conglomerates have very different compli...
Disadvantages
1. The extra layers of management increase costs. 2. Accounting disclosure is less useful information, many numbers are disclosed grouped, rather than separately for each business. The complexity of a conglomerate's accounts make them harder for managers, investors and regulators to analyze, and makes it easier for management to hide issues. 3. Conglomerates can trade at a discount to the overall individual value of their businesses because investors can achieve diversification on their own s...
In her 1999 book No Logo, Naomi Klein provides several examples of mergers and acquisitions between media companies designed to create conglomerates for the purposes of creating synergybetween them: 1. WarnerMedia included several tenuously linked businesses during the 1990s and 2000s, including Internet access, content, film, cable systems and tel...
Similar to other industries there are many companies that can be termed as conglomerates. 1. The Philip Morris group, which once was the parent company of Altria group, Philip Morris International, and Kraft Foodshad an annual combined turnover of $80 bn. Although Phillip Morris International and Kraft Foods were spun off to independent companies. ...
Holland, Max (1989), When the Machine Stopped: A Cautionary Tale from Industrial America, Boston: Harvard Business School Press, ISBN 978-0-87584-208-0, OCLC 246343673.McDonald, Paul and Wasko, Janet (2010), The Contemporary Hollywood Film Industry, Blackwell Publishing Ltd. ISBN 978-1-4051-3388-3"Conglomerate". Encyclopædia Britannica. 2007. Encyclopædia Britannica Online. November 17, 2007.List of largest companies by revenue. has been the world's largest company by revenue since 2014. This list comprises the world's largest companies by consolidated revenue, according to the Fortune Global 500 2023 rankings and other sources. [2] American retail corporation Walmart has been the world's largest company by revenue since 2014.
Holding companies are also created to hold assets such as intellectual property or trade secrets, that are protected from the operating company. That creates a smaller risk when it comes to litigation .
Tencent Holdings Ltd. ( Chinese: 腾讯; pinyin: Téngxùn) is a Chinese multinational technology conglomerate and holding company headquartered in Shenzhen. It is one of the highest grossing multimedia companies in the world based on revenue. It is also the world's largest company in the video game industry based on its equity investments, with Tencent Games being the subdivision of Tencent ...
