Which term describes a business practice of acquiring most or all competitors selling the same product?

• A. Horizontal Integration
• B. Vertical Integration
• C. Market Consolidation
• D. Strategic Mergers

Answer: (A)

This question tests the idea of expanding by purchasing rivals at the same level of the market. Acquiring most or all competitors selling the same product is horizontal integration. It involves firms at the same stage of the industry value chain joining together to reduce competition, increase market share, and gain economies of scale.

Vertical integration would mean buying entities along the supply chain, such as a supplier or a distributor, to control production and distribution. Market consolidation describes the outcome of having fewer players in a market and is broader than the specific action of acquiring competitors. Strategic mergers cover a range of merger motives and can involve various types of integration, not necessarily the direct acquisition of rival firms at the same level.