Horizontal Vertical

Integration Integration
Focuses on acquiring companies Focuses on expanding into businesses
in the same industry involve acquiring that are directly related to the core
or merging with
other companies
to expand a
business.
Creates economies of scale and scope company's
by consolidating similar businesses operations.

Reduces transaction costs and improves

have the potential coordination in the supply chain.
to increase a
Requires significant financial and company's market
power and reduce Requires significant financial and
managerial resources to integrate competition. managerial resources to integrate
acquired businesses acquired businesses.

create economies May result in reduced flexibility

of scale and scope
by consolidating
and increased risk.
similar or The
in n y
nt complementary bu ovat an a
c
ic a l
n if r ia businesses. s in io n ll
s ig n a g e ir e d ess , l
e s a Th op efficead
u ir m a c q u su c ey a l p o ie n t o
r eq t e h l r t u c y in
y d a r ed u as arr c ni , cre
t e g a n t e g r u lly . c e d a n y s o
t ie s . a n d a s e d
s tra in s s f f t i m new
h l to e l exi tru e l
Eac anciaces succ
b ili s t e
f in s o u r s s e s ty . co v el o
n c e r f r is
r e s in e
ns k,
bu or

Focuses on expanding into

businesses that are unrelated to the
core business.

Conglomerate Creates synergies by combining

businesses with different strengths
Integration and weaknesses.

May require significant financial and

managerial resources to integrate
acquired businesses.
Danica Damalerio May lead to a lack of focus and
reduced efficiency.
BSED SOCSTUD 1-1