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Horizontal integration is another competitive strategy that companies use.

The strategy helped Carnegie produce cheaper steel, and empowered it in the marketplace. It may also employ vertical integration to take over the reins of distribution of its products.Ī classic example is that of the Carnegie Steel Company, which not only bought iron mines to ensure the supply of the raw material but also took over railroads to strengthen the distribution of the final product. It is covered in business courses such as the MBA and MiM degrees.Ī company opts for vertical integration to ensure full control over the supply of the raw materials to manufacture its products. Vertical integration is a competitive strategy by which a company takes complete control over one or more stages in the production or distribution of a product. Vertical integration and horizontal integration are business strategies that companies use to consolidate their position among competitors.

Vertical integration and horizontal integration