Horizontal and Vertical Integration

Horizontal Integration

When a company wishes to grow through horizontal integration, its aim is to acquire a similar company in the same industry.

Vertical Integration 

A company that undergoes vertical integration acquires a company that operates in the production process of the same industry. Some of the reasons why companies choose to integrate vertically include strengthening their supply chain, reducing production costs, capturing upstream or downstream profits, or accessing new distribution channels. To do this, one company acquires another that is either before or after it in the supply chain process.

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