Difference between horizontal and vertical acquisition
A horizontal acquisition is when a company acquires another company which is in a
direct or in same industry. Eg. One clothing company acquire another clothing
company.
A vertical merger is when a company acquires another company that isn't in direct
competition within the same supply chain. Eg. One clothing company acquire another
textile company.
Advantages
1.
2.
3.
4.
5.
Reduce direct competition,
Increased market share,
Better capture of suppliers and distributors,
Focus on improving the product series,
Easy to manage due to similar products and processes,
6.
7.
8.
Access new markets and distribution channels.
Significant economies of scale,
Reduce costs by producing more products,
Disadvantages
1. Possibility of legal implications (for example, antitrust),
2. Possibility of decentralized structure,
3. productivity is hindered,
A conglomerate is a company made up of several distinct and sometimes unrelated
businesses. In a conglomerate, one company owns a controlling stake in several
smaller companies that conduct their business independently.