Question

Sanibel Autos Inc. merged with its competitor Vroom Autos Inc. This allowed Sanibel Autos to use its technological competencies along with Vroom Autos' marketing capabilities to capture a larger market share than what the two entities individually held. What type of integration does this scenario best illustrate

a. vertical
b. technological
c. horizontal
d. perfect

Answer 1

C. Horizontal

Step-by-step explanation:

Horizontal integration refers to the situation whereby a company acquires or merges with another company who is at the same level with them on the value chain. It is a business strategy usually aimed at acquiring a larger market share as we can see with this situation. Many companies are horizontally integrated whereby they combine with their competitors in the same level to gain upper hand in the market leading to more revenue and income. Here, Sanibel merged with Vroom who is the same stage in the value chain.