What is vertical and horizontal integration strategies?
Horizontal integration is an expansion strategy adopted by a company that involves the acquisition of another company in the same business line. Vertical integration refers to an expansion strategy where one company takes control over one or more stages in the production or distribution of a product.
What are the differences between horizontal and vertical?
A vertical line is any line parallel to the vertical direction. A horizontal line is any line normal to a vertical line. Horizontal lines do not cross each other.
What is the difference between vertical boundaries and Harizontal Boudaries?
In the vertical structure, decisions are made at the top and flow down first to middle management, then to supervisors and ultimately down to the workers. In a horizontal structure, employees are given leeway to make decisions on their own, usually based on company guidelines.
What is vertical diversification example?
Usually, one firm performs one process in a supply chain, but if a firm takes on more roles in the supply chain, then it is said to be using vertical diversification. For example, a soda maker can vertically diversify by acquiring aluminum makes or a firm that installs and maintains vending machines.
What is horizontal diversification?
a growth strategy in which a company seeks to add to its existing lines new products that will appeal to its existing customers.
What is vertical expansion strategy?
Vertical expansion is when a company moves to perform a service or produce a good on a few different parts of the supply chain. The supply chain is series of steps to produce a good or service. For example, the supply chain for the widget industry is: Companies source the raw materials needed for the widget.
What is horizontal integration strategy with example?
Horizontal integration is where a business joins with another at the same stage of the supply chain. In other words, two businesses that are similar, become one company. For instance, a merger between Nike and Adidas would be an example of horizontal integration.
What is the difference between vertical integration and related diversification?
While vertical integration involves a firm moving into a new part of a value chain that it is already within, diversification requires moving into an entirely new value chain. Many firms accomplish this through a merger or an acquisition, while others expand into new industries without the involvement of another firm.
What is the difference between a vertical and horizontal merger or acquisition?
A horizontal merger is defined as one business acquiring another that is in direct competition with it. A vertical merger is defined as one business acquiring another that belongs to the same supply chain.
What is horizontal and vertical diversification?
Horizontal integration or diversification involves the firm moving into operations at the same stage of production. Vertical integration is usually related to existing operations and would be considered concentric diversification.
What is the application of horizontal and vertical integration strategy?
Application of Horizontal and Vertical Integration Integration strategy is mainly used by the firms to: minimize competition by taking over competitors increase their market shares
What is the difference between vertical integration and external diversification?
Vertical integration is usually related to existing operations and would be considered concentric diversification. Horizontal integration can be either a concentric or a conglomerate form of diversification. External Diversification.
What are the different types of diversification strategies?
DIVERSIFICATION: VERTICAL OR HORIZONTAL? – Strategic Management External Diversification. Internal Diversification. Diversification: Grow Or Buy? Vertical Integration. Diversification strategies can also be classified by the direction of the diversification.