Both require the flow of materials to be constant to assure capacity utilization. Economies produced by major investments, results in increased size. Distribution systems create national and international markets. Management cadre provides coordination and control.
Preferred way is product development.
Caused by increased competitive pressure which saturated markets leading to capacity under-utilization and rising costs. Few firms responded to competition by reinvesting to improve. The top management did not understand new acquisitions. Overload in decision making in top offices. Restructuring for competitiveness.