What does horizontal integration refer to?

Horizontal integration refers to the strategy of acquiring or merging with companies that operate at the same level within the industry or market. This approach allows a firm to expand its market share, reduce competition, and achieve greater economies of scale. By consolidating operations with other businesses that offer similar products or services, a company can increase its efficiency, diversify its offerings, and strengthen its overall market presence.

This strategy contrasts with vertical integration, which involves merging with companies at different stages of the supply chain, such as suppliers or distributors. Thus, gaining control over distribution channels or merging with suppliers reflects vertical integration strategies rather than horizontal integration. Additionally, developing products for different market segments focuses on diversification rather than the consolidation characteristic of horizontal integration. Therefore, option B accurately captures the essence of horizontal integration within the context of business practices.