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Horizontal integration is the process of a company increasing production of goods or services at the same level of the value chain, in the same industry. A company may do this via internal expansion or through mergers and acquisitions .
In corporate portfolio models, diversification is thought of as being vertical or horizontal. Horizontal diversification is thought of as expanding a product line or acquiring related companies. Vertical diversification is synonymous with integrating the supply chain or amalgamating distributions channels.
Ansoff pointed out that a diversification strategy stands apart from the other three strategies. Whereas, the first three strategies are usually pursued with the same technical, financial, and merchandising resources used for the original product line, the diversification usually requires a company to acquire new skills and knowledge in product development as well as new insights into market ...
“Many retirees misunderstand diversification, presuming it solely involves spreading funds across different bank accounts or varied financial products,” said Tammy Trenta, a financial planner ...
Concentric diversification: Introducing a similar product within the existing product line with the purpose of leveraging existing expertise to expand the product range. Horizontal diversification: Introducing an unrelated new product alongside existing offerings with the objective of reaching new customer segments and reducing dependence on a ...
A horizontal integration strategy may be indicated in fast-changing work environments as well as providing a broad knowledge base for the business and employees. [68] A benefit of horizontal diversification is that it is an open platform for a business to expand and build away from the already existing market. [67]
The MPT is a mean-variance theory, and it compares the expected (mean) return of a portfolio with the standard deviation of the same portfolio. The image shows expected return on the vertical axis, and the standard deviation on the horizontal axis (volatility). Volatility is described by standard deviation and it serves as a measure of risk. [7]
Horizontal differentiation seeks to affect an individual's subjective decision-making, that is the difference cannot be measured in an objective way. For example, different color versions of the same iPhone or MacBook. A lemon ice cream is not superior to a chocolate ice cream, is completely based on the user's preference.