Horizontal Integration

The acquisition of additional business activities at the same train of the value chain is referred to as horizontal integration. This form of enlargement contrasts with vertical integration by which the firm expands into upstream or downstream activities. plain growth can be achieved by internal expansion or by external expansion through mergers and acquisitions of firms offering similar products and services. A firm may diversify by growing horizontally into unrelated businesses. near examples of horizontal integration include: * The Standard Oil gilds acquisition of 40 refineries. * An automobile manufacturers acquisition of a sport utility vehicle manufacturer. * A media companys monomania of radio, television, newspapers, books, and magazines. Advantages of Horizontal Integration The following are some benefits sought by firms that horizontally integrate: * Economies of scale - achieved by selling more of the same product, for example, by geographic expansion. * Economies of scope - achieved by sacramental manduction resources common to different products. Commonly referred to as synergies.

* Increased food market power (over suppliers and downstream channel members) * Reduction in the court of international trade by operating factories in impertinent markets. Sometimes benefits can be gained through customer perceptions of linkages amongst products. For example, in some cases synergy can be achieved by using the same brand name to promote ninefold products. However, such extensions can have drawbacks, as pointed out by Al Ries and Jack Trout in their marketing classic, Positioning. Pitfalls of Horizontal Integration Horizontal integration by acquisition of a competitor bequeath increase a firms market share. However, if the industry meanness increases significantly then anti-trust issues may arise. Aside from legal issues, other concern is whether... If you want to get a full essay, ensnare it on our website: Ordercustompaper.com

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