An automobile manufacturer that decides to purchase a truck manufacturer and a recreational vehicles manufacturer is engaging in horizontal integration.

Question

Quizplus · Accepted Answer

Horizontal integration refers to the strategy of acquiring or merging with competitors at the same stage of the production process to increase market share and reduce competition. In this scenario, the automobile manufacturer is acquiring companies in different markets (trucks and recreational vehicles), which is an example of conglomerate diversification.

An Automobile Manufacturer That Decides to Purchase a Truck Manufacturer