Horizontal and Vertical intergration
Length: 752 words (2.1 double-spaced pages)
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The Meaning of Vertical and Horizontal Integration
Horizontal integration is where an organisation owns two or more companies, on the same level of the buying chain. An example of this is the First Choice Group; they own First Choice Travel Agency and
First Choice Hypermarket, both of which are on the same level of the buying chain. The advantage of horizontal integration is that it can increase the company’s market share. Another good example of this type of integration is when EasyJet purchased the airline Go from British
Airways. Now EasyJet and Go both operate under the company name of
EasyJet.
Vertical integration is when an organisation own companies on two or more levels of the buying chain. Examples of this can be found within
“The Big 4,” all of them own an airline, travel agent and a tour operator. The companies have until recently used different names for their travel agency, airlines and tour operators, but now they are power branding their companies so that customers can see whom they are booking with. An example of this is TUI UK, which has rebranded its companies using the Thomson name.
Task 2B
This diagram shows the vertical integration that Thomson used to expand as an organisation.
Sector
2004 (Year)
2005 (Year)
Airline
Britannia Airways
Thomson Fly
Tour Operator
Thomson
Thomson
Travel Agent
Lunn Poly
Thomson
An example of Horizontal &
Vertical Integration
“The Big 4”
World Of TUI
Thomas Cook
My Travel Group
First Choice
Airline
Thomson Fly
Thomas Cook Airways
My Travel Lite
First Choice Airways
Tour Operator
Thomson
Thomas Cook Holidays
Airtours
First Choice
Travel Agent
Thomson Travel
Thomas Cook Travel
Going Places
First
Rating: Red (FREE)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
The Meaning of Vertical and Horizontal Integration
Horizontal integration is where an organisation owns two or more companies, on the same level of the buying chain. An example of this is the First Choice Group; they own First Choice Travel Agency and
First Choice Hypermarket, both of which are on the same level of the buying chain. The advantage of horizontal integration is that it can increase the company’s market share. Another good example of this type of integration is when EasyJet purchased the airline Go from British
Airways. Now EasyJet and Go both operate under the company name of
EasyJet.
Vertical integration is when an organisation own companies on two or more levels of the buying chain. Examples of this can be found within
“The Big 4,” all of them own an airline, travel agent and a tour operator. The companies have until recently used different names for their travel agency, airlines and tour operators, but now they are power branding their companies so that customers can see whom they are booking with. An example of this is TUI UK, which has rebranded its companies using the Thomson name.
Task 2B
This diagram shows the vertical integration that Thomson used to expand as an organisation.
Sector
2004 (Year)
2005 (Year)
Airline
Britannia Airways
Thomson Fly
Tour Operator
Thomson
Thomson
Travel Agent
Lunn Poly
Thomson
An example of Horizontal &
Vertical Integration
“The Big 4”
World Of TUI
Thomas Cook
My Travel Group
First Choice
Airline
Thomson Fly
Thomas Cook Airways
My Travel Lite
First Choice Airways
Tour Operator
Thomson
Thomas Cook Holidays
Airtours
First Choice
Travel Agent
Thomson Travel
Thomas Cook Travel
Going Places
First