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Unformatted text preview: differentiation, replication of the business model, reducing rivalry in an industry, and increasing bargaining power over suppliers and buyers. Disadvantages of horizontal integration include problems merging different company cultures, high management turnover in the acquired company when the merger is hostile, and underestimating the problems involved in mergers. The advantages of vertical integration are increased product differentiation, lower costs, or reducing industry competition. These benefits are achievable if it facilitates investments in efficiency-enhancing specialized assets, protects product quality, or results in improved scheduling. Disadvantages of vertical integration include increased cost structure, being locked into old technology when new more efficient technology is available, and unpredictability in the market....
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- Fall '10