"Horizontal integration is the process of a company increasing production of goods or services at the same level of the value chain, in the same industry."
When a company acquires or merges with similar companies in the industry to increase market share and reduce competition.
Definition of Horizontal Integration: Horizontal integration is the process of merging or acquiring companies that operate in the same industry or market.
Benefits of Horizontal Integration: This includes the advantages of economies of scale, increased market share, and increased bargaining power.
Types of Horizontal Integration: There are two types of horizontal integration, namely, forward integration and backward integration.
Factors Affecting Horizontal Integration: This includes industry structure, market demand, and competition, among others.
Horizontal Merger and Acquisition Process: The process of acquiring or merging with a company involves several steps, including due diligence, negotiation, and integration.
Synergies in Horizontal Integration: Companies can achieve synergies through horizontal integration, including operational economies of scale, marketing synergies, and financial synergies.
Market Power and Horizontal Integration: Horizontal integration can increase a company's market power, leading to the possibility of antitrust concerns and regulatory issues.
Examples of Horizontal Integration: Several real-life examples of successful horizontal integrations include Google's acquisition of YouTube and Facebook's acquisition of Instagram.
Horizontal Integration Strategies: There are different strategies that companies can use to achieve horizontal integration, including merger, acquisition, collaboration, and joint ventures.
Challenges and Risks of Horizontal Integration: Challenges include cultural and operational mismatches, regulatory hurdles, and failure to realize expected synergies.
Product-based horizontal integration: Product-based horizontal integration refers to the consolidation of companies that produce similar or complementary goods or services to increase market share and reduce competition.
Market-based horizontal integration: Market-based horizontal integration refers to the consolidation of firms operating in the same industry through mergers or acquisitions driven by market forces and aimed at increasing market share and competitiveness.
Technical-based horizontal integration: Technical-based horizontal integration refers to the consolidation of companies in the same industry that have similar production techniques, technologies, or innovative capabilities, aiming to enhance efficiency, reduce costs, and increase market power.
Geographic-based horizontal integration: Geographic-based horizontal integration refers to the expansion or combination of companies operating in the same industry but in different geographical markets.
Resource-based horizontal integration: Resource-based horizontal integration refers to the expansion strategy where a company acquires or merges with other firms in the same industry to gain control over essential resources and strengthen its competitive position.
Brand-based horizontal integration: Brand-based horizontal integration refers to the expansion strategy where firms merge or acquire competitors to strengthen their market positioning and leverage brand recognition.
Production-based horizontal integration: Production-based horizontal integration refers to the strategy in which a company acquires or combines with other firms operating in the same industry's production stage to improve efficiency and gain market power.
Customer-based horizontal integration: Customer-based horizontal integration in economics refers to the strategic alliance or merger of companies operating in the same industry that aim to expand their customer base and market share by joining forces.
Distribution-based horizontal integration: Distribution-based horizontal integration refers to the consolidation of companies operating at different stages of the supply chain, aiming to improve the efficiency and effectiveness of product distribution.
Operational-based horizontal integration: Operational-based horizontal integration refers to the consolidation of firms operating at the same stage in the production process to achieve cost efficiencies and streamline operations.
"A company may do this via internal expansion, acquisition, or merger."
"The process can lead to a monopoly if a company captures the vast majority of the market for that product or service."
"Other benefits include increasing economies of scale, expanding an existing market, or improving product differentiation."
"Horizontal integration contrasts with vertical integration, where companies integrate multiple stages of production of a small number of production units."
"To increase production of goods or services at the same level of the value chain, in the same industry."
"A company may achieve horizontal integration through internal expansion, acquisition, or merger."
"One consequence can be the creation of a monopoly if a company captures the vast majority of the market for a specific product or service."
"Horizontal integration can provide benefits such as increasing economies of scale, expanding an existing market, or improving product differentiation."
"Horizontal integration focuses on increasing production at the same level of the value chain within the same industry, whereas vertical integration involves integrating multiple stages of production in a few production units."
"Horizontal integration can lead to increasing economies of scale."
"Some strategies include internal expansion, acquisition, or merger."
"The risk is the potential establishment of a monopoly if a company dominates the majority of the market for a particular product or service."
"Horizontal integration allows for the expansion of an existing market."
"Horizontal integration can potentially improve product differentiation."
"Horizontal integration may be preferred over vertical integration when a company aims to increase production within the same industry rather than integrating multiple stages of production."
"Advantages include increased production capacity and potentially reduced costs."
"Horizontal integration can lead to market dominance if a company captures a significant share of the market for a specific product or service."
"Expanding an existing market can result in increased sales and potential for higher profits."
"Horizontal integration may contribute to product differentiation, allowing a company to distinguish its offerings from competitors."