Diversification strategies allow a firm to expand its product lines and operate in several different economic markets. 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. For example, a notebook manufacturer that enters the pen market is pursuing a horizontal diversification strategy. For example, a ketchup manufacturer starts producing salsa, using its current production facilities. Examples: 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. Horizontal diversification allow a firm to start exploring other zones in terms of product manufacturing. Examples include investing in several technology companies or in different types of bonds. These products are usually based on related technologies, meet different needs of buyers or … 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.. Horizontal diversification Horizontal diversification involves providing new and unrelated products or services to existing consumers. Horizontal diversification may be as broad or as narrow as the investor chooses. That is, horizontal diversification involves investing in similar instruments. Horizontal integration examples range across industries and include Arcelor and Mittal, Disney and Pixar and Facebook and Instagram. Increase in size expected to infuse economies of scale and scope. This strategy takes place when an organization introduces a new and distinct product to the existing customers. Concentric diversification strategies are rampant in the food production industry. Today, 54% of Disney’s revenues—but only 32% of its profits—come from movies and parks. In general, broader diversification equates to … The organization takes over those organizations which manufacture the same/ similar product or marketing functions. In horizontal diversification, however, you stay on the existing level of production, without trying to take over the role of vendors, suppliers, or distributors. Entertainment industry. An expected increase in market share. This is a more extreme sub-type of horizontal diversification. Horizontal Diversification vs Conglomerate Diversification. Companies Introduce into the production new products which are based on know-how, experience and technical-economic capabilities of the company. Film production houses also distribute movies through DTH networks. Horizontal diversification involves the extension of a production of products or service above and beyond the industry, in which the company operates. The most common strategies include concentric, horizontal and conglomerate diversification. Vodafone and Idea were two telecommunication giants in India. Horizontal Diversification. Examples of Horizontal Integration. The percentage of risk in horizontal diversification strategy is less as compared to the conglomerate diversification strategy because the organization already knows about its existing customers. ADVERTISEMENTS: 2. The classic example of horizontal diversification given in textbooks involves the weather, and two companies: [1] 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. 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