Horizontal Integration is best described as

• A. Developing another activity
• B. Outsourcing
• C. Merging with a supplier
• D. Vertical integration

Answer: (A)

Horizontal integration refers to two firms at the same point in the production process joining together, typically to become bigger players in the same market. This is usually done by merging with or acquiring a competitor, aiming to gain market share, economies of scale, and less competition. It differs from diversifying into different activities, outsourcing activities to outside providers, or buying suppliers or distributors (vertical integration). Among the given descriptions, the one that describes diversifying into a new activity is not horizontal integration, and merging with a supplier describes vertical integration, not horizontal. So horizontal integration is best represented by merging with a peer in the same line of business, rather than expanding into new activities, outsourcing, or purchasing a supplier.