During the 1970s,American oil companies acquired nonenergy companies (e.g.,copper,auto components) in response to anticipated decreases in investment opportunities in oil.This type of diversification is referred to as:

Question

Quizplus · Accepted Answer

Conglomerate integration involves diversifying into unrelated businesses in order to spread risk and increase profitability. This is what the oil companies did by acquiring nonenergy companies in anticipation of future decreases in investment opportunities in oil. Horizontal integration involves acquiring firms that are in the same industry and at the same level of the value chain, while forward and backward vertical integration involve acquiring firms that are either upstream or downstream in the value chain.

During the 1970s,American Oil Companies Acquired Nonenergy Companies (E