Horizontal integration is a corporate process that increases the production of goods or services in the same part of the supply chain. Companies can do this through internal expansions, acquisitions, or mergers.
This process can cause a monopoly if the company captures most of the market for that product or service.
Horizontal integration contrasts with vertical integration, where the company integrates multiple stages of production of a small number of production units.
Video Horizontal integration
Aliansi horizontal
Horizontal integration associated with horizontal alliances (also known as horizontal cooperation). However, in the case of horizontal alliances, partner companies form contracts, but remain independent. For example, Raue & amp; Wieland (2015) describes examples of logically independent legal logistics providers that work together. Such an alliance is concerned with competition.
Maps Horizontal integration
Aspects of horizontal integration
The benefits of horizontal integration for both companies and communities can include economies of scale and economic scope. For companies, horizontal integration can provide a reinforced presence in the reference market. It also allows companies that are horizontally integrated to engage in monopoly pricing, harming society as a whole and which may cause regulators to ban or limit horizontal integration.
Media term
Media critics, such as Robert W. McChesney, have noted that the current trend in the entertainment industry has led to an increase in the concentration of media ownership into the hands of small numbers of transmedia and transnational conglomerates. Media are seen to collect at the center where the rich have the ability to buy the business (eg, Rupert Murdoch).
What emerges is a new strategy for content development and distribution designed to improve the "synergy" between different divisions of the same company. Studio looks for content that can move smoothly across all media channels.
Example
Examples of horizontal integration in the food industry are Heinz and Kraft Foods mergers. On March 25, 2015, Heinz and Kraft merged into one company, a deal worth $ 46 billion. Both produce processed foods for the consumer market.
On December 9, 2013, Sysco agreed to buy US Foods but on June 24, 2015, federal judges ruled against an agreement saying that the merger would control 75% of the US food service industry and would hamper competition. This will be a horizontal integration, as both distribute food to restaurants, health care, and educational facilities.
On November 16, 2015, Marriott International announced that it would buy Starwood Hotels for $ 13.6 billion, creating the world's largest hotel chain after the deal closes. This merger was completed on September 23, 2016.
SAB Miller's $ 122 Billion Acquisition of AB-Inbev, completed in 2016, is one of the greatest deals of all time.
On November 1, 2017, Centurylink purchased Level 3 Communications for $ 34 billion, and entered Level 3 as part of Centurylink.
See also
References
Source of the article : Wikipedia
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