A conglomerate is made up of a number of companies that represent different business interests. These companies typically fall under a parent corporation that serves as the main overseer of business activities. Therefore, a conglomerate generally exists as a multi-industry entity. Because of its size, the business organization usually is comprised of subsidiaries based in various parts of the world.
From a profit-making perspective, conglomerates are considered advantageous because they are diversified. As a result, financial risk is reduced and capital is better utilized. If one of the subsidiaries suffers financially, other companies in the conglomerate can leverage out the effect.