What is an example of horizontal integration?

An example of horizontal integration is the purchase of Kmart by Sears. Horizontal integration occurs when two companies at the same level in the supply chain merge.

Horizontal integration offers a range of benefits including increased marketing power and a reduction of costs through economies of scale. As a company expands, it is able to achieve economies of scale by having a greater revenue base to spread its overhead costs.

Vertical integration is when a company purchases a company that is in a different level of the supply chain. Kmart purchasing one of the brands it sells is an example of vertical integration.