Horizontal integration and vertical integration are growth strategies that companies use to consolidate their positions and set themselves apart from their competitors. While both involveacquiringother businesses, either approach can help companies expand. There are important differences between...
There are three main types of vertical integration: backward, forward, and balanced integration. To learn the difference between the three, it’s essential to first review the basics of the supply chain and theriver metaphor. The "supply chain river" encompasses all elements involved in the prod...
Vertical Integration vs. Horizontal Integration Vertical integration involves acquiring or developing one or more important parts of a company’s production process or supply chain. For example, Netflix’s shift from licensing shows and movies from major studios to producing its own original content is...
Balanced Integration:A companymergeswith companies both before it and after it along the supply chain. A company must be the middleman and manufacture a product in balanced integration. Consider the supply chain process for Coca-Cola (KO) where raw materials are sourced, the beverage is made, a...
While vertical and horizontal mergers are separate concepts, they do share some aspects in common. For instance, both involve acquisitions in which the acquiring company already has some sort of relationship with the acquired company. Both types of mergers also raise the potential of anti-trust iss...
2 examples of vertical and horizontal growth Now that you understand the definition of each strategy, let’s look at some examples. Here are two examples of organizations using horizontal and vertical integration in today’s market. Horizontal growth: Uber When Uber first launched, it was a lo...
Vertical sales are sales of a product or service to a limited number of market sectors, rather than to all markets. A manufacturing company, for example, might design and produce products tailored to the needs of customers in the aerospace and automotive
The term contrasts with horizontal integration –when two companies in the same stage of the supply chain merge. Examples include Daimler Benz and Chrysler, Kraft Foods and Cadbury, Porsche and Volkswagen. There are three types of vertical integration: 1. Forward integration, when the merger or ...
Horizontal Integration: This business strategy involves acquiring or merging with companies at the same level in the supply chain, leading to increased market share, cost savings, diversification, and competitive advantage. Vertical Integration: By taking control of different stages of the production or...
Horizontal Diversification Precious Metals Portfolio Gold Silver Palladium Platinum Copper In the next example, an investment strategy uses vertical integration. This way, if the entire precious metals segment loses value over the next year, the bundle of portfolios is still robust because the value of...