CHAPTER III THE CONCENTRATION OF ENTERPRISES
§ 1 the Horizontal Concentration of Enterprises
Horizontal concentration of enterprises is when several similar independent businesses come together to form one company. In this process, the businesses may share some management or departments but remain independent in most other areas, except when making important economic decisions. This setup can be seen in groups like cartels or syndicates, where companies work together on buying and selling. The main aim of horizontal concentration is to gain control of the market and enjoy the benefits that come with being a monopolist.
§ 2 the Vertical Concentration of Enterprises
Vertical concentration is when different independent companies combine to form one business, usually because they use each other's products. This can happen in industries like textiles or printing. In vertical concentration, the companies work together and share resources. However, just owning different companies doesn't mean they will work well together; the owner must make sure they cooperate.
Many people believe that vertical concentration helps secure sales for products or sources for raw materials, but managers often say they could find better deals if they were not tied to one company. If a company is efficient, it doesn't need to merge with others. Today, some think that vertical concentration is less important because many businesses are focusing on specialization instead of merging, and new independent companies are constantly appearing.
§ 1 the Horizontal Concentration of Enterprises
Horizontal concentration of enterprises is when several similar independent businesses come together to form one company. In this process, the businesses may share some management or departments but remain independent in most other areas, except when making important economic decisions. This setup can be seen in groups like cartels or syndicates, where companies work together on buying and selling. The main aim of horizontal concentration is to gain control of the market and enjoy the benefits that come with being a monopolist.
§ 2 the Vertical Concentration of Enterprises
Vertical concentration is when different independent companies combine to form one business, usually because they use each other's products. This can happen in industries like textiles or printing. In vertical concentration, the companies work together and share resources. However, just owning different companies doesn't mean they will work well together; the owner must make sure they cooperate.
Many people believe that vertical concentration helps secure sales for products or sources for raw materials, but managers often say they could find better deals if they were not tied to one company. If a company is efficient, it doesn't need to merge with others. Today, some think that vertical concentration is less important because many businesses are focusing on specialization instead of merging, and new independent companies are constantly appearing.