Business – 1.3 Size of business – Business growth | e-Consult
1.3 Size of business – Business growth (1 questions)
Login to see all questions.
Click on a question to view the answer
Horizontal integration – the acquisition or merger of a firm operating at the same stage of the production process in the same industry.
- Example: The merger of Vodafone and Idea Cellular in India.
- Advantage: Increases market share and can create economies of scale.
- Disadvantage: May attract regulatory scrutiny and lead to reduced competition.
Vertical integration – Backward – acquiring or merging with a supplier of inputs.
- Example: Toyota’s purchase of Denso, a major parts supplier.
- Advantage: Greater control over input quality and cost stability.
- Disadvantage: Requires significant capital and may reduce flexibility to switch suppliers.
Vertical integration – Forward – acquiring or merging with a distributor or retailer.
- Example: Apple’s ownership of its retail stores (Apple Stores).
- Advantage: Direct access to customers and ability to capture retail margins.
- Disadvantage: Increased operational complexity and potential channel conflict.