HopefullyInLawSchool
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Simple English definitions for legal terms
horizontal integration
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A quick definition of horizontal integration:
Horizontal integration is when two or more businesses that make similar products in the same area join together. This is also called a horizontal merger. It's like when two kids who both like to make cookies decide to work together and make even more cookies. They become one big team instead of two separate ones.A more thorough explanation:
Definition: Horizontal integration refers to the merger or acquisition of companies that operate in the same industry and at the same level of production. It involves combining two or more companies that produce similar products or services in the same geographic region.
Example: An example of horizontal integration is the merger of two automobile manufacturers, such as Ford and General Motors. Both companies produce similar products and operate in the same industry, so a merger between them would be considered horizontal integration.
Another example is the merger of two fast-food chains, such as McDonald's and Burger King. Both companies offer similar products and operate in the same geographic region, so a merger between them would also be considered horizontal integration.
These examples illustrate how horizontal integration involves the combination of companies that are direct competitors in the same industry and at the same level of production. The goal of horizontal integration is to increase market share, reduce competition, and achieve economies of scale.