Vertical Integration- Horizontal vs. Vertical Integration

Vertical Integration- Horizontal vs. Vertical Integration

Horizontal vs. Vertical Integration

According to Hill & Schilling (2024), horizontal integration includes merging with or acquiring competitors within the same industry to create a competitive advantage arising from an increased scope of operations and large company size. Consequently, vertical integration includes expanding operations into an industry that provides inputs for the company or a company that sells, distributes, or uses the company’s products. Apple Inc. is among the companies that use vertical integration to gain a competitive advantage by controlling the entire production process. According to Periwal et al. (2018), Apple Inc.’s vertical integration involves the in-house production of software, hardware, and processors for all its devices. On the other hand, companies such as JP Morgan Chase gain a competitive advantage by using horizontal integration.

The use of vertical and horizontal integration may influence employees in various ways. For example, a company that practices vertical integration, such as Apple Inc., would be a better workplace because it offers employees opportunities to improve themselves. Liu (2016) argues that vertical integration promotes innovation by promoting investment in innovative ideas. Therefore, employees in organizations practicing vertical integration can get the support they need to try new ideas and make inventions that contribute to self-improvement. Companies that use horizontal integration may not be excellent workplaces because they offer limited opportunities for employees to try out new ideas. According to Staňková et al. (2018), horizontal integration leads to more complex processes of promoting changes and decreased autonomy. Therefore, employees may be forced to follow strict orders to retain their jobs. Hire our assignment writing services in case your assignment is devastating you.

If I owned a business, I would implement vertical integration so that I would have control of the production process. Vertical integration would also enable me to create opportunities for employees to develop and implement new ideas, leading to innovation, which can contribute to the business’s success. The betterment of my employees can also contribute to the business’s success by increasing their commitment to the business, resulting in improved business performance and success.

 References

Hill, C. W., & Schilling, M. A. (2024). Strategic management: Theory & cases: An integrated approach. Cengage Learning Asia Pte Ltd.

Liu, X. (2016). Vertical Integration and Innovation. International Journal of Industrial Organization, 47, 88–120. https://doi.org/10.1016/j.ijindorg.2016.02.002

Periwal, M., Jain, I., & Rajkumar, H. (2018). Vertical Integration: A Preliminary Insight. International Journal of Innovative Science and Research Technology, 3(2). https://doi.org/ ISSN No:-2456 –2165

Staňková, P., Papadaki, Š. & Dvorský, J. (2018). Comparative analysis of the perception of advantages and disadvantages of integration of Hospitals. E+M Ekonomie a Management, 21(1), 101–115. https://doi.org/10.15240/tul/001/2018-1-007

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Unit 6 DB: Horizontal vs. Vertical IntegrationUnit 6 DB: Horizontal vs. Vertical Integration
First, name a company that practices horizontal integration and describe the structure. Now, do the same for a vertically integrated company.

Vertical Integration- Horizontal vs. Vertical Integration

In your opinion, which company would be a better place to work? Which offers workers a better opportunity to improve themselves?
Now, if you owned the business, which would you implement? Think again about the workers’ opportunities. Does their betterment also mean what is best for your business?