Horizontal integration differs from vertical integration in that it?
(a) requires investment from a number of people who share ownership in the firm (b) consolidates many firms involved in the same business into on giant company (c) merges stocks from multiple businesses into a new organization. (d) combines different businesses involved in all phases of a product's development
What are the difference between vertical integration and horizontal integration in a business?
Horizontal integration is an action where a company acquires another company that is essentially doing the same thing, e.g. when a biscuit company decides to buy another biscuit company. This type of integration is the type that you would see when one company is looking to develop some type of monopolistic advantage by reducing competition and increasing market share in order to develop specific economies of scale.Vertical integration is when a company that operates within one section of the overall supply chain acquires another company within that same supply chain, e.g. when a biscuit company decides to buy the trucking company that distributes the biscuits to retailers or decides to buy the company that provides the raw ingredients for the biscuits. This type of integration is the type you would see when one company is looking to cut overall costs and potentially even speed up the entire supply chain (or at least tailor the activities of the trucking company or the raw ingredient company to their own specific requirements).Hope this helps.
What are the pros and cons of vertical integration?
Vertical integration means companies own more than one step in the supply and value chain.The key pros are reduced dependency on suppliers, coherence of customer and brand experience and control over larger parts of the supply chain and pricing strategies, while the key cons are higher capital requirements and risks, reduced flexibility to follow trends and act nimbly in respect to market volatility.