QS Study

Circular combinations mean that combination whereby two or more allied units are brought together so that a member unit may achieve maximum economic gain. It is the association of different types of companies in allied lines is a circular combination. For e.g. a cell phone manufacturer combining with a car manufacturer or a company manufacturing consumer durable combining with an automobile manufacturing company. It is also known as the mixed or complementary combination.

S.S. Sarker defines circular combination as, “It is the integration of those units which are predicting and marketing different types of goods and services and they want to have a common administration.”

We can show this circular combination as a diagram. Main objectives of the circular combination are to create a monopoly market, to earn profit more and expand the risk. Management of the industries engaged in circular combination is same.