What is horizontal integration in strategic management?
Horizontal integration is a business strategy in which one company acquires or merges with another that operates at the same level in an industry. Horizontal integrations help companies grow in size and revenue, expand into new markets, diversify product offerings, and reduce competition.
What is horizontal integration strategy with example?
Horizontal integration is where a business joins with another at the same stage of the supply chain. In other words, two businesses that are similar, become one company. For instance, a merger between Nike and Adidas would be an example of horizontal integration.
What is integration strategy in strategic management?
What is an integration strategy? Integration strategies are processes that businesses can use to enhance their competitiveness, efficiency or market share by expanding their influence into new areas. These areas can include supply, distribution or competition.
What is vertical and horizontal integration in strategic management?
Horizontal integration is an expansion strategy adopted by a company that involves the acquisition of another company in the same business line. Vertical integration refers to an expansion strategy where one company takes control over one or more stages in the production or distribution of a product.
What is the importance of horizontal integration?
Undergoing horizontal integration can benefit companies and typically takes place when they are competing in the same industry. The advantages include increasing market share, reducing competition, and creating economies of scale.
Who uses horizontal integration?
Facebook and Instagram. One of the most definitive examples of horizontal integration was the acquisition of Instagram by Facebook (now Meta) in 2012 for a reported $1 billion. 1 Both companies operated in the same industry (social media) and shared similar production stages in their photo-sharing services.
What are the 3 types of integration?
The main types of integration are:
- Backward vertical integration. This involves acquiring a business operating earlier in the supply chain – e.g. a retailer buys a wholesaler, a brewer buys a hop farm.
- Conglomerate integration.
- Forward vertical integration.
- Horizontal integration.
What are the two types of integration strategy?
There are two types of integration strategies: horizontal and vertical.