Horizontal integration is the acquisition, merger, or expansion of a business that increases the market share in its existing industry.
The core aspect of horizontal integration is merging with or acquiring a direct competitor. This can happen through mergers, acquisitions, or internal expansion into similar product lines or markets. ; Internal Expansion: A company expands its product offerings or geographical reach within the same industry without acquiring another company. ; Economies of Scale: Larger companies can often leverage economies of scale to reduce production costs, negotiate better deals with suppliers, and improve overall efficiency. ; Product Line Extension: A company expands its product offerings to include similar products within the same industry. (e.g., A soft drink company acquires a bottled water company)
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Vertical integration involves the acquisition of business operations within the same... costs Horizontal Integration Examples Kroger and Albertsons: In 2023, the grocery company Kroger...
Horizontal integration is a type of merger where competitors operating in the same market combine their operations to benefit from economies of scale. ; If two companies that offer virtually identical or similar goods or services decide to undergo a merger, the transaction is considered horizontal integration. ; The horizontal integration strategy – in which two companies operate at the same level of the value chain and decide to merge – enables companies to increase in size and scope. ; Together, the combined entity’s reach is far broader in terms of expanding into new markets and diversifying a consolidated portfolio of offerings.
Horizontal integration can be a viable business strategy for companies looking to increase revenue and market share in a competitive industry. Learn about the three types of horizontal integration...
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The types of vertical integration include backward, forward, balanced, and disintermediation. Successful vertical integration can improve competitiveness, lead to cost savings, and enhance...
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Horizontal and vertical integration are important parts of a company’s M&A strategy to increase return on investment, attain rapid global growth, gain new technologies and talent, improve supply ch...