Horizontal integration

Horizontal integration

"Integration in English" by Andrew c is licensed under CC BY-SA 3.0

the process of a company increasing production of goods or services at the same level of the supply chain. A company may do this via internal expansion, acquisition or merger.

Pros

Can be a sign of progress, e.g. many of the same type of small, struggling companies consolidate into a bigger one.

Cons

Can lead to a monopoly.

Real Talk

It's critical to strike a balance. Horizontal integration can have positive impacts (e.g. driving down technology and installation costs), but too much of a good thing can result in anti-trust issues (e.g. one utility company owning all the distribution systems).

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