What is horizontal consolidation?

Horizontal consolidation is a business strategy, with two separate companies or organizations actively merging their two organizations. There are usually horizontal consolidation between two or more organizations or companies in the same industry with the added condition that both or more separate organizations had to achieve a comparable point in the production of a product or service. This means that before any two companies will be able to consider horizontal consolidation, companies must be at the level of development, which will facilitate them smoothly. For this purpose, a company that has advanced much more than other society will not be able to achieve horizontal consolidation. In this case, the merger between companies will be considered vertical consolidation due to the difference between the two or more organizations.

Reason why companies or companies are often related to the horizontal consolidationScening your profits, the corner of the market, integrating services across the Council and increasing the performance of such companies. An example of a situation where horizontal consolidation can be clearly seen is in the telecommunications industry, where the main companies are connected, resulting in telecommunications companies that are much larger than before the merger. In this case, the reason is why the merger is considered horizontal, due to the fact that separate telecommunications companies already offer similar services and only join forces to create a larger society. Various companies already have their own service packages, customer base and product lines that can in some cases be merge with a number of other companies or companies.

Of course, such a practice has some basic disadvantages, even if it offers companies some advantages. For one reason, the merger of companies creates in this way the momentmeg of the company that will adversely compete with other competitors in the field. This creates a situation where it isA disproportionate monopoly stemming from the increased strength of mega corporations that will be able to use their increased strength at the expense of other smaller companies. Horizontal consolidation also affects consumers negatively, as reducing competition and possibilities reduces the power of consumers who do not have a high diversity from which they can choose. It also leaves consumers to the mercy of such mega companies that may decide to take advantage of increased power as a means of storing elevated fees and prices to consumers.