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A business technique known as "horizontal integration" involves a company acquiring or merging with other businesses that are involved in the same level of the supply chain. In other terms, it is a strategy in which a business grows by purchasing or combining with rival businesses.
With the eradication of rivalry, this tactic can assist businesses in achieving economies of scale and expanding their market share. For instance, two businesses that manufacture comparable goods could merge to pool their resources, cut costs, and boost productivity. This might enable them to reduce their rates and draw in more clients.
Yet, monopolistic behaviors and anti-competitive behavior can also result from horizontal integration. A firm may be able to control prices and limit consumer choice if it buys too many of its rivals. Regulatory action or legal action against the corporation may result from this.
Many industries, including technology, telecommunications, and media, have used horizontal integration as a common technique. For instance, Disney's acquisition of 21st Century Fox in 2018 allows it to increase the kind of material it offers and the number of distribution options.
