In microeconomics and strategic management, the term horizontal integration describes a type of ownership and control. It is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets. Horizontal integration in marketing is much more common than vertical integration is in production. Horizontal integration occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm, e.g. a car manufacturer merging with another car manufacturer. In this case both the companies are in the same stage of production and also in the same industry. This process is also known as a "buy out" or "take-over". The goal of horizontal integration is to consolidate like companies and monopolize an industry.
A monopoly created through horizontal integration is called a horizontal monopoly.
A term that is closely related with horizontal integration is horizontal expansion. This is the expansion of a firm within an industry in which it is already active for the purpose of increasing its share of the market for a particular product or service.
Nineteenth century oil tycoon John D. Rockefeller and his company Standard Oil are frequent examples of the use of horizontal integration.
Read more about Horizontal Integration: Benefits of Horizontal Integration, Media Terms
Famous quotes containing the words horizontal and/or integration:
“And yet out of eternity, a thread
separates itself on the blackness,
a horizontal thread
that fumes a little with pallor upon the dark.”
—D.H. (David Herbert)
“The more specific idea of evolution now reached is—a change from an indefinite, incoherent homogeneity to a definite, coherent heterogeneity, accompanying the dissipation of motion and integration of matter.”
—Herbert Spencer (1820–1903)