What is the difference between horizontal and vertical integration?

Horizontal integration is an expansion strategy that involves the acquisition of another company in the same business line. Vertical integration is an expansion strategy where a company takes control over one or more stages in the production or distribution of its products. Why Are Horizontal and Vertical Integration Important?

Why is vertical integration riskier than horizontal integration?

In horizontal integration, any company's success along the supply chain benefits all other companies in the same chain. In contrast, a product's success determines the profitability of every company along the supply chain during vertical integration. This makes vertical integration riskier since a dip in profits impacts the entire supply chain. 10.

Why is vertical integration more expensive than horizontal integration?

Horizontal integration requires less capital to integrate since a company shares costs with its acquired or merged company. However, the price is higher in vertical integration, as the company has to cater to all the expenses in obtaining other businesses along the supply chain.