What Is The Difference Between Vertical And Horizontal Integration Quizlet

Vertical integration provides a greater level of control over the entire production process and can therefore result in lower cost and wastage.

Both horizontal integrations vs vertical integration are part of business strategies that occurs during the course of the expansion of any business. Vertical integration on the other hand is a firm s ownership of vertical related activities meaning the firm takes complete control of more than one stage of the supply chain. Horizontal integration on the other hand is when a company acquires or merges with a similar firm in the same industry. For example the merger of two car producers or two.

Three main types of integration in external growth of firm size are as follows. Horizontal integration refers to the expansion strategy adopted by the corporations which involves acquisition of one company by another company where both the companies are in the same business line and at same value chain supply level whereas vertical integration refers to the expansion strategy adopted by the corporations where one company acquire another company who is at the different level usually at the lower level of its value chain supply process. Vertical integration occurs when a company owns all parts of the industrial process. Differences between horizontal integration and vertical integration.

Learn vocabulary terms and more with flashcards games and other study tools. Those companies that are at the same level of production are merged with one another in horizontal integration. The most important difference between horizontal and vertical integration is that horizontal integration only brings synergy but not self sufficiency while vertical integration helps the company gain synergy with self sufficiency. 9 horizontal integration and vertical integration.

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Vertical integration occurs when a business owns all parts of the industrial process while horizontal integration occurs when a business grows by purchasing its competitors. Horizontal integration and vertical integration can be distinguished from each other in the following ways. Horizontal integration is the merger of two firms at the same stage of production producing the same product.