What is horizontal integration?

Horizontal integration is a practice in business using which companies that produce a similar product or provide similar services. In general, the company will be involved in horizontal integration to increase its market share for a particular type of product or service. Such horizontal growth is an important part of business and microeconomics and is also an important skill of strategic management. If the company comes to check all the product or service production, it is believed to have a horizontal monopoly. Integration

is considered horizontal only if all mergers and acquisitions are performed at the same level of production. The automobile company, which is connected with another automobile company, is involved in horizontal integration, but is not a car company that purchases a refinery or food chain. The aim of horizontal integration is not to control all aspects of production, from raw materials to the final product. Instead, he is able to produce a large numberthe same product or similar products and to check a large market share.

Vertical integration, on the other hand, the aim is to control all aspects of product production or service. The automobile company involved in vertical expansion would actually try to get refinery, mines, factories and anything else necessary to produce the finished product. The monopoly created by vertical expansion is known as a vertical monopoly. Horizontal expansion and integration is much more common than vertical expansion and integration.

horizontal integration brings businesses that are able to expand effectively. They are able to sell more of their products, which is usually the goal of any company. Businesses that supply several different products or services can manner more efficiently after merger. Control of larger shjs on a given market that provides business more power over the flow of products and resourcesfrom other companies. All this added control, strength and productive ability increase business efficiency.

There are also disadvantages for horizontal integration. When a sufficiently large market share focuses on a small number of businesses, there may be anti -imal legal problems. Unplanned expansion can also be more harmful than beneficial. If the company expands without a solid horizontal plan, it can be quickly amazed. With proper planning, however, horizontal expansion can lead the company to large rewards.