Vertical integration is when a company controls several steps of production and distribution to increase its power in the marketplace. Horizontal integration is when a company takes over a similar company to increase its market share. Examples include a mobile company opening its own retail stores through forward integration or merging with a competitor. Vertical and horizontal integration can provide economies of scale, expand capabilities, and reduce competition while allowing better control and services. However, each strategy has advantages and drawbacks to consider.

2. VERTICAL AND HORIZONTAL INTEGRATION
Presentation Overview
 Introduction
 What is vertical and horizontal integration
 Example of vertical and horizontal integration
 Vertical integration classification
 Vertical and horizontal integration strategy performed by
 Conclusion
 References

3. INTRODUCTION
• In today’s business world company has in place a strategic plan.
• The strategic plan is formalized road map that defines how the
organization implements the selected strategy.
• A plan spells out where an organization is going over the next year
or more and how it’s going to get there.
• Having and working with the right strategic tools can give a clear
picture of the opportunities available and dangers to prepare for.

4. VERTICAL AND HORIZONTAL
INTEGRATION
Vertical integration
The process in which several steps in the production and/or
distribution of a product or service are controlled by a single company, in
order to increase that company’s power in the marketplace.
Horizontal integration
known as lateral integration) a strategy to increase the market share
by taking over a similar company. This takes over / merger / buyout can be
done in the same geography or probably in other countries to increase your
reach.

5. EXAMPLE OF VERTICAL AND HORIZONTAL
INTEGRATION
http://www.google.com/search?q=image+of+vertical+and+horizontal+integration&rls
=com.microsoft:en-us&ie=UTF-8&oe=UTF-8&startIndex=&startPage=1
(Larry, 2013)

6. VERTICAL INTEGRATION CLASSIFICATION
Backward integration. when the company tries to own an input product
company.
Forward integration. where the business tries to control the post
production areas, namely the distribution network. Like a mobile company
opening its own Mobile retail chain.
Balanced integration is a mix of the above two

7. VERTICAL AND HORIZONTAL INTEGRATION
STRATEGY
Vertical and Horizontal integration strategy can be performed by organization
which have established themselves and probably have a stable life. The
instantaneous advantage of executing them is as follow:
Have economies of scale
Expand your knowledge and capabilities
Increase market (and profits)
Own the whole life cycle so that you can change it the way required
Reduce competition (by merging with them rather than competing)
Provide better services

8. CONCLUSION
When a company wants to grow, it has two options: expand its current business or
go into business with other companies through acquisition or merger.
If it chooses the acquisition option, it can do so in a way that strategically enhances
its current operations through vertical or horizontal integration. Each technique has
advantages and drawbacks, and companies may use both strategies to create the growth
they want.

9. REFERENCES
BizDharma.com (2013). What is vertical and horizontal integration?
Retrieved from: http://bizdharma.com/blog/what-is-vertical-and-horizontal-
integration
Olsem, E. (2013). Why is a strategic plan important?
Retrieved from: http://www.dummies.com/how-to/content/why-is-a-strategic-plan-
important.html