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Definition:
A horizontal intergration occours when a firm takes over or merges with another firm in the same stage of production, Producing similar or same products .
+Advantages
+Achieave Greater Economies of Scale
+Increase its market share
+Reduction in average cost as a result of rationalization
-Disadvantages
-Increase in average cost -if the company is too large and experiencing dis economies of scale
-The two companies maybe located some distance apart,although advances in ICT are reducing this problem.
-There is initially likely to be some extra cost involved in seeking to harmonize,for instance,wage rates and accounting systems in the two companies
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∙ 9y ago
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How do conglomerates and vertical mergers differ frim horizontal mergers?
Conglomerate is a merger between firms that are involved in totally unrelated business activities. A vertical merger is a merger between firms that exist in the same supply chain, while a horizontal merger is a merger between firms in the same industry.
How do horizontal merger vertical merger and conglomerates differ?
A horizontal merger combines two firms in the same market. A vertical merger combines two firms involved in different stages. A conglomerate combines two firms that produce unrelated goods or services. Pretty much they all combine two firms or more but in different ways.
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