What is horizontal integration primarily focused on?

Horizontal integration mainly involves the acquisition of similar firms at the same stage of production. This strategy seeks to consolidate market power by increasing the company’s share within the industry, which can result in increased revenue, economies of scale, and reduced competition. For example, if a company that manufactures shoes acquires another shoe manufacturer, it can leverage resources, streamline operations, and enhance its market presence.

This type of integration is distinct from vertical integration, where a company would focus on acquiring different stages of production, such as suppliers or distributors. Additionally, while market expansion through new geographic areas and investing in unrelated business opportunities are viable growth strategies, they do not accurately represent the core idea behind horizontal integration, which is primarily concerned with consolidating and expanding within the same sector.