It is also known as parallel or trade unit integration. it is affected by units engaged in manufacturing similar products or rendering similar services. It involves bringing in together of competing firms under single ownership and management as shown. For instance, if two or more sugar mills are combined under the same management, it will be case of horizontal combination. Tata Iron and steel Ltd. and Associated Cement Company are the illustrations of horizontal combination.

Sugar Factory A

Sugar Factory B

Sugar Factory C

Sugar Factory D

Horizontal Combination

Benefits. The benefits of horizontal combinations are as follows:

(i)    It eliminates wasteful inter firm competition in the same line of industry.
(ii)    It helps in achieving economies of large scale production and distribution,
(iii)    It can control supply of the products and market prices.

Evils. Horizontal combination may lead to the following evils:

(i)    It creates monopoly which is harmful from the point of view of the customers.
(ii)    There may be restriction of output and exploitation of customers.
(iii)    It gives rise to concentration of economic poser in a few hands.

For more help in Horizontal Integration click the button below to submit your homework assignment