Horizontal And Vertical Integration Flashcards
What is horizontal integration ?
Where a business buys a business at the same level in the distribution chain.
Why do businesses decide to horizontally integrate ?
To be able to offer a wider variety of products and services.
What is vertical integration ?
Where a business on a different level on the distribution chain buys another business.
Why do businesses decide to vertically integrate ?
To control more sectors of the travel and tourism industry. Vertical integration can go backwards or forwards along the channel.
What have some tour operators done ?
They have bought all aspects of a distribution chain which allows for them to have economies of scale and offer better prices to customers. In the process of this however it can cause some smaller / independent businesses to have had to close as they can’t compete.
Are most huge tour operators horizontally or vertically integrated ?
They are both.
