Horizontal Integration
The process of increasing production at the same part of the supply chain
Real World Example
During the Industrialization era from 1870 to 1900, horizontal integration was a strategy where a company would expand by acquiring or merging with other firms at the same stage of production. This approach allowed businesses to increase their market share, reduce competition, and achieve economies of scale, making their operations more efficient and profitable. It responded to the challenges of intense competition and the need for companies to grow quickly in a rapidly industrializing world. Today, horizontal integration is still relevant as companies strive to dominate their market segments, like how Facebook acquired Instagram to strengthen its position in the social media landscape. This affects us because it can lead to fewer choices and higher prices as companies that control much of the market may have less incentive to innovate or lower costs for consumers.
