What is the primary purpose of horizontal integration?

The primary purpose of horizontal integration is to expand market influence through acquisitions. This strategy involves a company acquiring or merging with other companies at the same stage of production within the same industry. By doing so, a firm can increase its market share, reach new customers, and enhance its competitive position in the marketplace. Through horizontal integration, businesses can benefit from economies of scale, increased bargaining power with suppliers, and reduced competition as similar companies consolidate.

While enhancing distribution networks, increasing efficiency in production, and focusing on customer service improvements are important aspects of a firm's overall strategy, they are not the central goal of horizontal integration. Instead, the focus is on growth through acquiring similar firms to strengthen an existing market presence and leverage collective resources for greater influence.