In microeconomics and strategic management, the term horizontal integration describes a type of ownership and control. It is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets. To get this market coverage, several small subsidiary companies are created. Each markets the product to a different market segment or to a different geographical area. This is sometimes referred to as the horizontal integration of marketing. The horizontal integration of production exists when a firm has plants in several locations producing similar products. Horizontal integration in marketing is much more common than horizontal integration in production. It is contrasted with vertical integration. Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. ... This article or section does not cite its references or sources. ... In economics, a business is a legally-recognized organizational entity existing within an economically free country designed to sell goods and/or services to consumers, usually in an effort to generate profit. ... For other uses, see Corporation (disambiguation). ... Look up Market in Wiktionary, the free dictionary. ... A Market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. ... It has been suggested that Vertical expansion be merged into this article or section. ...

A monopoly created through horizontal integration is called a horizontal monopoly^{[citation needed]}. This article is about the economics of markets dominated by a single seller. ... Horizontal monopoly refers to monopoly achieved through horizontal integration. ...

Usually a monopoly is created through both horizontal and vertical integration. The situation in which a company takes over another in the same business, thus eliminating a competitor (competition) and achieving both a broader market, and greater economies of scale, but also takes over its upstream suppliers and its downstream buyers, therefore reducing production costs

A term that is closely related with horizontal integration is horizontal expansion. This is the expansion of a firm within an industry which it is already active, the purpose is to increase its share of the market for a particular product or service.

Benefits of horizontal integration

Horizontal integration allows:

• Economies of scale
• Economies of scope
• Strong presence in the reference market

The increase in output from Q to Q2 causes a decrease in the average cost of each unit from C to C1. ... This article or section does not cite any references or sources. ...

Media terms

In media, horizontal integration is the structure through which a media institution owns companies in only one sector of the industry (production, distribution or exhibition). An example is the merger between Boeing and McDonnell Douglas or Exxon and Mobil.

See also

• Horizontal market
• Vertical integration
• Wang Williams
• Economies of scale
• List of management topics
• List of marketing topics
• List of economics topics
• Monopoly
• Strategic management
• Target market