Horizontal Integration
The expansion of a company through the acquisition of other companies engaged in the same stage of production of the same product. An example would be the acquisition of one chain of retailers by another.
Implications
A growth strategy where a company expands its operations by acquiring or merging with other companies in the same industry at the same stage of production, often used to increase market share, reduce competition, and achieve economies of scale.
Example
Example: A large food manufacturer pursues horizontal integration by acquiring smaller competitors, consolidating its position in the market and reducing overall competition.
Related Terms
Different from vertical integration, which involves expanding into different stages of production (e.g., suppliers or distributors), horizontal integration focuses on expanding within the same industry level.
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