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Horizontal Integration
Can anybody give me an example of an advantage and disadvatage of horizontal integration?
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There's loads but a few examples:
Advantage (to the travel company) - most customers won't realise that seemingly different travel companies / providers are actually owned by one big company. Therefore your customers may buy 1 service from 1 of your companies (e.g. accommodation) and think they're saving money by buying another service (e.g. flights) from a different company - but you still get all the money.
Disadvantage (to the company) - not many really. A large company may find it harder to adapt when times are hard, but they normally survive just by making people redundant.
Advantage (to customer) - you could argue that prices can be kept lower.
Disadvantage (to the customer) - any price saving is likely to be artificial as there is less natural competition in the market place.
Advantage (to employees) - stronger company, potentially more secure employment.
Disadvantage (to employees) - risk of lower wages.
Advantage (to other tourism providers) - none.
Disadvantage (to other tourism providers) - less able to compete with huge companies.
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