Horizontal diversification refers to when a company expand its business industries by diversified products. The products are unrelated to each other and has limited potential for economies of scope.

Advantages:

An advantage of horizontally diversified a corporation with multiple business types is that to allocate resources and address them to each one strategically. The corporation often gets price advantages on supplies and resources that it can distribute across each business type.

Companies rest in more business types may have a more efficiency internal capital market than others. In a diversified company, some businesses generate surplus funds that can be shift to businesses that need the funds.

Acquiring an unrelated business can