Course Unit 5: Inter-company Relationships Exercises

Explain the differences between horizontal, vertical, and diagonal intercompany relationships by means of examples.

Horizontal strategic alliances are formed between partners operating in the same business area. The firm partners with a competitive company to improve its position against other competitors.

A vertical strategic alliance is a partnership between a firm and its supplies or distributors. Some firms utilize vertical alliances to produce their products and services. Vertical alliances deepen the relationship of the firm with suppliers through the exchange of know-how and commercial intelligence.

Diagonal is the relation between external company to make some project to be done like

hiring IT service department from outside. like Fossil has IT support relation with Infosys.

• Name tree options/instruments to establish intercompany relationships via behavioural coordination. 


• Name tree options/instruments to establish intercompany relationships via structural change. •

distribution of employee in a different form in a tree structure  like one main then 2 2nd head

then so on .

other way is like 2 main then 4 4 or can be more under .

Explain the three forms of agreements that are typically applied in intercompany relationships •

Intercompany agreements are contracts made among two or more businesses or divisions owned by the same parent company. It is a contract that refers to the internal transactions of sales or transfers of goods and services between the businesses.


Explain two options for companies to invest in other companies.

• Name the 5 objectives of intercompany connections.

What is the difference between a holding company group and a parent company group? • Please define the terme „merger“. Which are the two forms of a merger?

holding company has a sole purpose to exercise control over other companies, called the subsidiaries. … On the other hand, a group is a set of parent companies and subsidiaries that work as a single economic entity and that are managed by a common sourced of control.

A merger occurs when two companies come together as equals and form an entirely new company.