Vertical and Horizontal Integration

HORIZONTAL INTEGRATION

Horizontal integration is where an organisation owns two or more companies, on the same level of the buying chain.

The advantage of horizontal integration is that it can increase the company’s market share.

The advantage of horizontal integration is that it can increase the company’s market share.

A good example of this, when ‘’Go’’ a budget airline owned by British Airways was taken over by EasyJet in 2002. 

When the companies merged EasyJet ‘’power branded’’ this means that all of the logos and names that Go had used previously where replace by the EasyJet name and logo.

This had a negative impact on customers, EasyJet has more market control, and this allows them to dictate what the prices can be.

The positive side of this integration is that EasyJet now has more customers flying with them and therefore can have more market space to promote themselves.

VERTICAL INTEGRATION

Vertical integration is when an organisation own companies on two or more levels of the buying chain.

The new EasyJet Holidays vertically integrated tour operator went live today.

Central to the new system is the integration of accommodation from the lowcostbeds bedbank  with the vast EasyJet air route network around Europe, giving what is being touted as at least five million holiday options.  

The EasyJet Holidays service has been around for a number of years, using hotel stock from TUI-owned Hotelopia, but the new system will create protected package holidays for customers and have a wider range of accommodation options.