What does 'horizontal integration' refer to in business strategy?

Horizontal integration refers specifically to a business strategy where a company seeks to acquire or merge with competitors operating at the same level of the supply chain within the same industry. This strategy is primarily aimed at increasing market share, reducing competition, and achieving economies of scale. By acquiring competitors, a company can consolidate its position in the market, leveraging synergies in operations, marketing, and distribution.

For instance, if a large beverage company acquires a smaller beverage brand, it increases its product offerings and customer base while reducing the number of competing brands in the market. This allows the company not only to dominate the market further but also to negotiate better pricing with distributors and suppliers due to increased sales volumes.

In contrast, acquiring suppliers or focusing on unrelated industries signifies different strategies—vertical integration and diversification, respectively. Additionally, engaging in international partnerships pertains to global business strategies, rather than concentrating on competitors within the same industry. Thus, the correct response highlights a crucial aspect of competitive strategy in business.