Horizontal diversification may be as broad or as narrow as the investor chooses. The company has pursued a diversification strategy, which means purchasing other companies that enable it to bring new products into new markets while remaining true to Disney’s origins. Horizontal integration occurs when a company increases its production, whether of goods or of services, usually by a merger or acquisition, or by internal growth. ADVERTISEMENTS: This article will help you to differentiate between horizontal and vertical diversification of firms. In general, broader diversification equates to … The organization takes over those organizations which manufacture the same/ similar product or marketing functions. Horizontal integration examples range across industries and include Arcelor and Mittal, Disney and Pixar and Facebook and Instagram. An expected increase in market share. Horizontal diversification Horizontal diversification involves providing new and unrelated products or services to existing consumers. Horizontal diversification is typically the diversification strategy with the least amount of risk involved, as you’re working mostly within familiar customer and market segments. Examples: Horizontal diversification. Horizontal Diversification. Examples of Horizontal Integration. Horizontal diversification involves the extension of a production of products or service above and beyond the industry, in which the company operates. These products are usually based on related technologies, meet different needs of buyers or … Film production houses also distribute movies through DTH networks. Horizontal diversification is when you hold different instances of the same asset class.In this form of portfolio diversification, you’re trying to reduce localised or industry sector specific risks.. A broad index-based ETF is a good example of horizontal diversification.. Here we are going to look at some of the recent real-life examples of horizontal integrations to get an idea about what motivations lead to this process and how have companies benefitted from it: Example #1 – Vodafone-Idea. Each strategy focuses on a specific method of diversification. Today, 54% of Disney’s revenues—but only 32% of its profits—come from movies and parks. Say you’re the CEO of the Dunder Mifflin Paper Company — it might make complete sense to … Horizontal Diversification vs Conglomerate Diversification. Nature: In horizontal diversification, two businesses, similar or dissimilar, join together. ADVERTISEMENTS: 2. Companies Introduce into the production new products which are based on know-how, experience and technical-economic capabilities of the company. This is a more extreme sub-type of horizontal diversification. Diversification strategies allow a firm to expand its product lines and operate in several different economic markets. Entertainment industry. The most common strategies include concentric, horizontal and conglomerate diversification. The classic example of horizontal diversification given in textbooks involves the weather, and two companies: For example, a ketchup manufacturer starts producing salsa, using its current production facilities. Increase in size expected to infuse economies of scale and scope. For example, a notebook manufacturer that enters the pen market is pursuing a horizontal diversification strategy. Examples include investing in several technology companies or in different types of bonds. This strategy takes place when an organization introduces a new and distinct product to the existing customers. Horizontal Diversification Strategy. Difference # Horizontal Diversification (Integration): 1. 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