Essay
horizontal and vertical integration unit 1 investigating travel and tourism
- Institution
- PEARSON (PEARSON)
horizontal and vertical integration
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By: winnybwana • 4 year ago
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IntegrationWhat is horizontal integration?
Occurswhen companies are bought out or merged at the same level in the chain of distribution,
such as travel agencies buying each other. Often original brand names are retained so the
general public areunaware of the takeover. If a tour operator buys another tour operator at the
same level in the chain of distribution, this is know as horizontal integration. Most of the major
tour operators in the UK are vertically and horizontally integrated.
Diagram to show
What is vertical integration?
s where the supply chain of a company is owned by that company. Usually each member of the
supply chain produces a different product or (market-specific) service, and the products combine
to satisfy a common need. It is contrasted with horizontal integration. Vertical integration occurs
when two companies at different levels in the chain of distribution merge or are bought. For
example a tour operator may buy a travel agency. Tour operators have bought or created
airlines, hotels and travel agencies. This means they own all the different components in the
chain of distribution and are able to control the whole operation. For example First Choice and
Tui are both tour operators and they merged together, now Thomson own both them two and Tui
is frequently advertised on Thomson broaches but it is in a smiley face style; Co-op Travel and
Thomas Cook have recently merged to save costs and make more profit.
Diagram to show
Make reference to what backwards and
forwards integration include?
Benefits of integration
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