ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Horizontal integration is where a business joins with another at the same stage of the supply chain. In other words, two businesses that are similar, become one company. For instance, a merger between Nike and Adidas would be an example of horizontal integration.

Detailed explanation-2: -A merger between Coca-Cola and the Pepsi beverage division, for example, would be horizontal in nature. The goal of a horizontal merger is to create a new, larger organization with more market share.

Detailed explanation-3: -Example. Two automobile manufacturing companies merging to form a new larger automobile manufacturing company is an example of a horizontal merger. When the same automobile manufacturing company merges with its input suppliers to form a new company which dominates the supply chain, it becomes a vertical merger.

Detailed explanation-4: -Horizontal mergers occur when companies of the same industry merge. They often result in a way to eliminate competition by creating one powerful company instead of two competitors. Horizontal mergers can greatly increase revenues, as the combined companies have access to a greater variety of products or services.

Detailed explanation-5: -Example: Merger of Vodafone India and Idea Cellular Limited, two telecommunication companies, is a classic example of a horizontal merger.