Th3.1: Horizontal Integration Advantages

Question 1

What is horizontal integration?

Answer 1

where firms in the same industry at the same stage of production integrate

Question 2

What are the three advantages of horizontal integration?

Answer 2

increases market share
specialise and rationalise
already has expertise

Question 3

Increase market share

Answer 3

helps to reduce competitiveness as a competitor is taken out and increases market share, giving firms more power to influence markets

Question 4

Specialise and rationalise

Answer 4

firms will be able to specialise and rationalise, reducing the areas of the businesses which are duplicated

Question 5

Already has expertise

Answer 5

the business is able to grow in a market where it already has expertise, which is more likely to make the merger successful