USA HISTORY

Detailed explanation-1: -Horizontal integration occurs when a business grows by purchasing related businesses-namely, its competitors. Vertical integration, on the other hand, occurs when a business takes control of one or more stages in production or distribution, thereby owning all of the parts of the industrial process.

Detailed explanation-2: -Horizontal integration is a business strategy in which one company grows its operations at the same level in an industry. Horizontal integrations help companies grow in size and revenue, expand into new markets, diversify product offerings, and reduce competition.

Detailed explanation-3: -Reduces competition by removing key rivals – this increases market share and lifts a firm’s pricing power. Buying an existing and well-known brand can be cheaper in the long-run than organically growing a brand – this can then make entry barriers higher for potential rivals and lead to higher long-run monopoly profits.

Detailed explanation-4: -Facebook and Instagram. 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-5: -Here are several examples of horizontal integration: Two manufacturers of electric engines merge. One entity produces engines for cars, while the other entity produces engines for trucks. Two manufacturers of retail homes merge.