In which situation would horizontal integration be an especially effective strategy?
A) when an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition
B) when an organization competes in a slowing industry
C) when decreased economies of scale provide major competitive advantages
D) when an organization has neither the capital nor human talent needed to successfully manage an expanded organization
E) when competitors are succeeding due to managerial expertise or having particular resources an organization possesses

Question

Quizplus · Accepted Answer

Horizontal integration can increase market power and decrease competition, which can lead to monopolistic characteristics. If the federal government is not likely to challenge the organization's market dominance, horizontal integration can be especially effective.

Answer: B 
 When an industry is slowing down, consolidation through horizontal integration can be a way to eliminate competition and gain market share. However, it may not be the most effective strategy in every situation.

Answer: E 
 If competitors are succeeding due to managerial expertise or having particular resources that an organization lacks, horizontal integration can be an effective strategy to gain access to those resources or expertise.

Therefore, the best choices are A, B, and E.

In Which Situation Would Horizontal Integration Be an Especially Effective