Final answer:
Conglomerates overcome discounts by establishing a well-respected brand for the parent company, while also forming lobbying groups to influence favorable policies.
Step-by-step explanation:
To overcome the conglomerate discount, many conglomerates have sought to establish a brand for the parent company. A well-respected brand name, which has been built up over many years, can create a positive perception and deliver value to all businesses within the conglomerate. It helps to signal quality, trustworthiness, and can often command a premium price due to its established market presence.
Additionally, the formation of lobbying groups by conglomerates can serve to influence public policies and government regulations in a way that benefits the entire group. By coming together, firms can advocate for policies that create a favorable business environment for themselves. This collaboration can also be seen when competing corporations form an association, drawing strength from numbers, addressing common industry issues, and benefiting from favorable governmental policies.