Horizontal Integration Assignment Help

Horizontal Integration: In horizontal integration, competition in the industry can be reduced by using two strategies. First is by using oligopoly strategies by the firm. In other words, the firm by avoiding price war corruption, horizontal integration can reduce the extent of rivalry among companies in the market. This can be done by horizontal integration through using tacit based coordination among the rival firms. Another way of reducing rivalry is the merger or acquisition strategy with the rival firm that can further result to eliminate the excess capacity in an industry. As a result of this, price war between the rival firms is started. There are various firms that have used one of these ways or strategies of horizontal integration to become the industry leader and also got success.


For example, Oracle is one of them. The company also adopted major mergers or acquisitions of software technologies or firms that were leading the industry. Oracle adopted acquisitions strategy to take out the excess capacity of the software development industry. Another reason behind the move of Oracle was the discounted price offered by major rival firms of Oracle to customers that resulted into price wars in the industry. By acquiring major firms, Oracle also obtained competitive advantage through differentiating its product offerings in the market. As per assignment help experts, Another benefit or advantage of using horizontal integration as leadership tool is the bargaining power over the suppliers or customers. In addition, by using horizontal integration, the firms can also score higher profitability at the expense of buyers or suppliers. An organization can also become the larger buyer of products offered by the suppliers. Furthermore, the organization can also bargain the prices down for the inputs, which further can result into benefits in terms of lowering its cost structure. There are various examples of real world firms that gained leadership position by using horizontal integration method as a leadership tool. For example, Wal-Mart that is well positioned itself as a low cost retailer firm has also adopted horizontal integration method (Hill & Jones, 2012). With the help of this method, the company attained a leading position in the retail industry.


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