Horizontal Integration Summary and Forum

Media Studies – Horizontal Integration – Key Words
Media Studies – Horizontal Integration – Key Words

What is Horizontal Integration? Description

Horizontal Integration

Like its counterpart, Vertical
Integration, Horizontal Integration is a potential strategic move
which a firm may consider. Horizontal Integration means to acquire business
activities at the same level of the value chain. This can mean:

  • Acquiring activities dealing with similar products, so that synergies
    accrue and there is a degree of ‘sensible’ diversification. For example
    complementary confectionary products supported by the same basic marketing
    messages.
  • Acquiring activities that are substitutes for one’s products.
    Hence a firm can cover the threat from substitutes implicated as one of
    Porter’s 5 Forces. For example Canon moving into digital camera’s.
  • Acquiring competitors. In this way reducing the threat from competition.
  • Completing the product range which is ‘expected’ by the customer.
    For example, Microsoft has pursued this strategy with its Microsoft Office
    Software.

Usage of Horizontal Integration. Applications

Strategic Planning.

Steps in Horizontal Integration. Process

See:
Acquisition
Integration Approaches

Strengths of Horizontal Integration. Benefits

  • Economies of scale.
  • Synergy. Economies of scope.
  • Defense against substitutes.
  • Reduction in competition.
  • Fulfilling customer expectations.
  • Increased negotiation power. Get more leverage over powerful suppliers
    or customers.

Limitations of Horizontal Integration. Disadvantages

  • Synergies may be more imaginary than real. A famous example was
    SAAB with its cars and aircraft.
  • Substitutes market is often very different. To turn an acquisition into
    a success is a big and lengthy management challenge.
  • Reduction in competition, or even a monopoly, may lead to anti-trust
    issues.

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Presentation

Mergers, Acquisitions & Corporate Control

Corporate Control, Mergers and Acquisitions, Anti-takeover Measures, Synergies
This presentation is about corporate control and mergers and acquisitions, including the following sections:
1. What is…

Video

Vertical Integration and Horizontal Integration

Difference Between Vertical Integration and Horizontal Integration
Simple explanation of the essence of the 2 main models for corporate expansion (vertical and horizontal integration) by …

Article

Antitrust Enforcement

Horizontal Mergers
The DOJ-FTC Merger Guidelines were developed for and best deal with horizontal mergers where the theory of harm is coord…

Article

Horizontal Mergers

Competition policy, prices
This paper by David M. Spector addresses the effect of horizontal mergers on prices.
It is shown that if firms compete…

Article

Open Source Projects

Horizontal Innovation Networks
Innovation development, production, distribution and consumption networks can be built up horizontally – with actors con…

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Compare with Horizontal Integration:
Vertical Integration
| Value Chain |
Porter Five Forces |
Leveraged Buy-out |
Acquisition
Integration Approaches |
Parenting Styles |
Core Competence |
Insourcing |
Co-opetition

Return to Management Hub: Finance & Investing | Strategy & Innovation
| Supply Chain & Quality

More Management Methods, Models and Theory

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