Vertical or horizontal?

This topic contains 17 replies, has 17 voices, and was last updated by  Thomas Teltscher 7 months, 3 weeks ago.

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  • #116445

    Yoke Chang Tan
    Participant

    I believe it is always important to question the intent of the integration like most have pointed out. A useful framework is to relook at the business model canvas. The company would need to decide where to play and how to play. Would the integration enhance the where/how to play? If yes, then it would be ideal for the acquisition to take place (regardless vertical or horizontal).

    #116526


    Participant

    The company’s strategic goals should come first and then align that with the market cycle, industry potential growth and market size.

    #116620

    Thomas Teltscher
    Participant

    It’s an interesting question. I am not sure whether there is a generally valid answer. I would tend to believe that horizontal integrations are easier as the acquirer is already familiar with the industry, whereas vertical M&A requires good knowledge of the relevant market. The lessons that can be learned, however, may be more interesting in vertical acquisitions, as new industry know-how is being acquired.

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