Definition of Horizontal integration:
Horizontal integration is a competitive strategy that can create economies of scale, increase market power over distributors and suppliers, increase product differentiation and help businesses expand their market or enter new markets. By merging two businesses, they may be able to produce more revenue than they would have been able to do independently.
The merger of companies at the same stage of production in the same or different industries. When the products of both companies are similar, it is a merger of competitors. When all producers of a good or service in a market merge, it is the creation of a monopoly. If only a few competitors remain, it is termed an oligopoly. Also called lateral integration. See also vertical integration.
Horizontal integration is the acquisition of a business operating at the same level of the value chain in a similar or different industry. This is in contrast to vertical integration, where firms expand into upstream or downstream activities, which are at different stages of production.
How to use Horizontal integration in a sentence?
- Sometimes two companies will have horizontal integration and join together with the hopes of making better profits as a pair.
- We are initiating a horizontal integration between the Microsoft and Apple companies to create the megacorporation that will be AppSoft.
- Utilizing different organization and structural approaches to coordinate an organizations operations often uses horizontal integration , which involves cooperation with entities that function on a similar level.
Meaning of Horizontal integration & Horizontal integration Definition