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The formation of a conglomerate, especially using divisions which tend to have a cyclical business model, is a method of diversification in order to achieve a more even predictable flow of overall income. They also allow certain efficiencies in areas such as human relations, purchasing, and distribution.
Conglomerates are large companies that are made up of divisions (other companies) that maintain their identities and are mainly unrelated businesses.
However, some conglomerates appear to have been formed in order to gain more control over certain markets. these are usually the ones with divisions that are more closely related. An example would be a media group. Such groups should probably not be called conglomerates at all. Perhaps cartel would be a more fitting term.
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