QS Study

Features of Horizontal Combination

The horizontal combination is the association or merger of business organizations doing exactly the same type of business or trade. Generally, a horizontal combination is made of the associations or the business units of doing exactly the same types of business or trade. There are some common features of the horizontal combination. These features of this combination one given below:

The same type of Products: The industries which one involved in this combination normally they produce same types of goods or products. Otherwise, they cannot make a horizontal business combination.

Common Business Policy: The industries of this combination must follow some common business policies. Otherwise, the awkward environment will be created among them.

Elimination of Intent Competition: Main objective of creating this combination is to eliminate intense competition. They can buy materials collectively and can distribute the products or services among the customers collectively.

Managing and Controlling: In the horizontal business, combination management fix the amount of production of each industry according to the demand of customers. Then they can fulfill the demand of the customers and control the combination properly.

Collective Co-ordination: Industries participate in the horizontal combination divide market among than by collective co-ordination on the basis of country, pollution etc. As a result, they can maintain their relationship in a disciplined way.

Keeping their own entity: Participators of this combination makes a combination but they keep their own entity. Somebody think that they may lose their own entity but it is not true for every horizontal combination.

Distribution facilities: Normally industries that are engaged in this combination they distribute their product collectively as a result cost and problems of distribution will be reduced. It is a positive side of horizontal combination.

The same type of business market: The horizontal combination has occurred only if the market is same for the products and the services. Like the market may be of monopoly or the duopoly etc.

These are the main features of the horizontal business combination. For these feature horizontal combination is used among the business organization.