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Horizontal integration is the process of a company increasing production of goods or services at the same level of the value chain, in the same industry. A company may do this via internal expansion or through mergers and acquisitions .
Horizontal integration, when a company increases production of goods or services at the same level of the value chain and in the same industry (e.g via internal expansion, acquisition or merger) Vertical integration, when the supply chain of a company is integrated and owned by that company (i.e. integration of multiple stages of production)
These integration mechanisms are defined as meta-integration, vertical integration, and horizontal integration. Meta-integration is based on the management and business philosophy which defines the company's consideration of and relation to its stakeholders’ values.
Horizontal integration occurs when a firm enters a new business (either related or unrelated) at the same stage of production as its current operations. For example, Avon's move to market jewellery through its door-to-door sales force involved marketing new products through existing channels of distribution.
Horizontal integration and vertical integration, in microeconomics and strategic management, styles of ownership and control; Regional integration, in which states cooperate through regional institutions and rules; Integration clause, a declaration that a contract is the final and complete understanding of the parties
Contrary to horizontal integration, which is a consolidation of many firms that handle the same part of the production process, vertical integration is typified by one firm engaged in different parts of production (e.g., growing raw materials, manufacturing, transporting, marketing, and/or retailing). Vertical integration is the degree to which ...
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In economics the word integration was first employed in industrial organisation to refer to combinations of business firms through economic agreements, cartels, concerns, trusts, and mergers—horizontal integration referring to combinations of competitors, vertical integration to combinations of suppliers with customers.