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Horizontal Synergies
Synergies that occur between business units at the same level in a corporation's hierarchy.
Implications
The efficiencies and cost savings achieved when two companies operating at the same level in the supply chain or industry combine their operations, often resulting from shared resources, reduced duplication, and increased bargaining power.
Example
Example: Two regional airlines achieve horizontal synergies by merging, allowing them to consolidate flight routes, reduce overlapping staff, and negotiate better terms with suppliers.
Related Terms
Different from vertical synergies, which arise from combining companies at different stages of the supply chain, horizontal synergies are realized when similar businesses at the same level merge or collaborate.
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