what is horizontal integration 
horizontal integration is the acquisition of a business operating at the same level of the value chain in the same industry that is they make or offer similar goods or services this is in contrast to vertical integration where firms expand into upstream or downstream activities which are at different stages of production understanding horizontal integrationhorizontal integration is a competitive strategy that can create economies of scale increase market power over distributors and suppliers improve product differentiation and help businesses expand their market or enter new markets by merging two businesses may be able to produce more revenue than they would have been able to do independently however when horizontal mergers succeed it is often at the expense of consumers especially if the merger reduces competition for this reason horizontal mergers are heavily scrutinized by regulators to see if they violate antitrust laws indeed the real motive behind a lot of horizontal mergers is that companies want to reduce competition either from potential new entrants established rivals or firms offering substitute or alternative goods these are three of the five competitive forces that shape every industry as identified in porter s five forces model the other two forces the power of suppliers and of customers drive vertical integration types of horizontal integrationthere are three primary forms of horizontal integration mergers acquisitions and internal expansions 