Horizontal integration
Horizontal integration combines activities at the same stage of a value chain, commonly through acquiring or merging with a competitor. It may increase scale, market access or shared capabilities, but also creates integration costs and can raise competition-law concerns. It differs from vertical integration, which extends into earlier or later stages of the supply chain.
Worked example
A regional bakery acquires another bakery serving neighbouring towns. The combination is horizontal because both produce and sell baked products at the same stage. Acquiring a flour mill would instead be backward vertical integration.
Common mistake
Being in the same broad industry is not enough to classify direction: identify the activities and stage being combined. Claimed synergies are not guaranteed.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBL | Direct | September 2026–June 2027 |