25 Analyse disadvantage of horizontal integration.

[Sir Afzal Shad]

25 Analyse disadvantage of horizontal integration.[3]
Hint: Risk of diseconomies of scale > The combined business may become too large and difficult to manage > This can lead to poor communication and lower efficiency.

[shamaim shakeel]

KN)
A disadvantage of horizontal integration is that when two businesses at the same stage of production join, it can become difficult to manage and control the larger business.

(APP)
For example, if two clothing brands merge, there might be confusion in managing staff and decisions.

(AN)
This can cause poor communication between departments.
It may also slow down decision making and create conflicts between managers.as result, the business can lose efficiency and face higher costs, which reduces profit.

[EmmanWaseem]

There is a risk of diseconomies of scale
If a business merges with another business it will become large and will be hard to manage
This leads to poor communication and low efficiency

[Aarib Saad]

(KN)It can lead to Managerial Diseconomies of scale.
(APP)For instance, if two restaurants create a merger, it can cause managing issues as now double the amount of Cooks and Chefs will be needed to be managed in the restaurants as well as management will be needed for twice the amount of supply of ingredients.
(AN)This can lead to mistakes being made in terms managing resources, leading to customer's expectations regarding food and service not being met, worsening brand image.

[Aayan Zaidi]

KN: Horizontal integration is when two firms in the same industry and stage of production join together.
APP: E.g if two clothing brands merge, they might find problems combining their staff and management styles.
AN: It can lead to clashes, job losses, higher costs, and may even attract government attention for reducing competition.