Nonetheless, mergers following an acquisition can benefit growth and expansion strategies. By merging with another business, you reduce company costs whilst combining skills and tools to produce quality products.
Mergers also help with organization, reducing management demands and simplifying your high velocity sales cadence. Again, it reduces competition for potential customers, along with combining existing customer bases for easier market expansion.
Integration Strategy
Similar to internal vertical and horizontal growth strategies, integration strategies also acquire or work with other businesses in specific areas of production, distribution, product marketing, and sales.
This is more accessible to businesses not ready to create new departments as part of an expansion strategy, instead using resources and expertise from other businesses to promote your products and expand reach. It also creates opportunities for brand collaborations.
a. Horizontal Integration
Looking externally, horizontal integration seeks other businesses in the same industry or at a similar level to acquire or work with.
This reduces competition between the businesses, as both work together on product expansion, using referrals or other partnership marketing schemes to reach the current markets of both businesses. Also, it shares market research and development tools, creating more desirable products for your target market using customer metrics.
This is commonly seen with fashion brands, designing clothing ranges in tandem that appeal to both customer bases.
The businesses then both contribute to product marketing, introducing their existing customers to other brands through the new products and partnership referral schemes. Alternatively, acquisition for horizontal integration still gains the creativity and innovation from both businesses, contributing to the overall profits of the parent company.