ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Horizontal Integration
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Vertical Integration
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Either A or B
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None of the above
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Detailed explanation-1: -A horizontal merger is when competing companies merge-companies that sell the same products or services. The T-Mobile and Sprint merger is an example of a horizontal merger.
Detailed explanation-2: -Horizontal integration allows for control of the market and customer base. Examples include Nintendo buying Monolith Soft, Amazon starting its own delivery service, and Google purchasing Motorola. Examples include T-Mobile buying Sprint, Walt Disney taking over Pixar, and Petsmart merging with Chewy.
Detailed explanation-3: -One of the most definitive examples of horizontal integration was the acquisition of Instagram by Facebook (now Meta) in 2012 for a reported $1 billion. 1 Both companies operated in the same industry (social media) and shared similar production stages in their photo-sharing services.
Detailed explanation-4: -An example of a horizontal acquisition would be a candy company that purchasing another candy company with different products but a similar production schedule.