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What do you mean by "Vertical Growth" and "Horizontal Growth"?

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Question ajoutée par Rajinikant Ramachandran , Group Accounts Manager & Factory Operations , Al Mehdi Group
Date de publication: 2013/10/23
Khaled Abdelrehim ACCA DipIFR CMA
par Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company

vertical growth is to control your suppliers and distributers, while horizontal growth is to control your competitors

Zafar Iqbal
par Zafar Iqbal , Teacher (Pak Studies) Subject Specialist , Home Tutor

Agreed with Khaled Abdelrehim (CMA) with the following answer:

vertical growth is to control your suppliers and distributers, while horizontal growth is to control your competitors

 

Mohammad Tohamy Hussein Hussein
par Mohammad Tohamy Hussein Hussein , Chief Executive Officer & ERP Architect , Egyptian Software Group

This really depends on the context you are discussing.

If you are discussing industries, then vertical growth is a growth within the same industry and horizontal growth is a growth into other indusries.

Mohammed Salim Allana
par Mohammed Salim Allana , Compliance and Assurance Manager , United Arab Bank

Promotion to the similar role in the different department is Horizontal career growth.

 

Step up to the next level promotion such as manager from an officer position is a vertical growth.

Ali Patrik Eid
par Ali Patrik Eid , Admissions Advisor , University of the People

Horizontal growth is the expanding of a firm's activities into other geographic regions and/or by increasing the range of products and services offered to current markets. Vertical growth, in contrast, involves a firm's taking over a function previously performed by a supplier or a distributor. Concentric diversification, in contrast, is the addition of products or divisions, which are related to the corporation's main business, but are added because of the attractiveness of other industries rather than because they support the activities of the current product lines.

Amir Elsayed
par Amir Elsayed , Owner , Wizzora

  • Horizontal growth: is a strategy where a company acquires, mergers or takes over another company in the same industry value chain.There are3 types of Horizontal growth Acquire:A+B=A      A+C=AMerge:  A+B=AB   AB+c=ABCHostileTakeover:is the acquisition of the company, which does not want to be acquired.
  • Vertical Growth: is a strategy used by a company to gain control over its suppliers or distributors in order to increase the firm’s power in the marketplace, reduce transaction costs and secure supplies or distribution channels.There are2 types of vertical growth 1- Backward integration - is a strategy where a firm gains ownership or increased control over its previous suppliers.”2- Forward integration - is a strategy where a firm gains ownership or increased control over its previous customers (distributors or retailers).

Yousuf Malik
par Yousuf Malik , Senior Financial Accountant , QatarEnergy Holdings (UK) Ltd

Horizontal Merger (Integration or growth) = When a company expands its business into different products that are similar to current lines. 

 

E.G when Mittal Steel merge with Arcelor (another steel producer)

 

 Vertical Merger (Integration or growth) = When a company expands its business into areas that are at different points of the same production path. 

 

E.g merger occurred between Time Warner Incorporated, a major cable operation, and the Turner Corporation, which produces CNN, TBS, and other programming. 

 

Difference = Horizontal is when they merge within their own market (i.e between competitor) while Vertical is when they merge with upstream or down stream into different market (i.e their supplier or completely different market)

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