Q:

What is diagonal integration?

A:

Oxford Reference defines diagonal integration as strategic acquisitions, alliances and information partnerships between companies. The purpose of diagonal integration is to improve access to consumers and achieve economies of scale. These partnerships are characterized by tightly-related, consumer-oriented services.

The main goal in diagonal integration is to take advantage of possible synergies between companies, thereby increasing profitability and productivity. Companies partnering up via a diagonal integration strategy are typically from different but complementary industries. An example of this strategy is seen with travel agents who offer travel insurance, car rentals, travel planning, ticketing, add-on excursions and other services from business partners.

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