Assoc. Prof. Muhammad Findi - Merger / Integrasi Horizontal dan Vertikal

Summary

In this video, the speaker discusses two main types of company integrations: horizontal and vertical. Horizontal integration involves merging companies within the same industry to strengthen market share, while vertical integration involves merging companies across the supply chain to reduce costs and ensure stable supply. Both types aim to improve efficiency, profitability, and market position. The speaker emphasizes that such integrations are not harmful as long as they do not disrupt markets, increase prices, or reduce supply, suggesting that governments play a role in regulating these mergers to protect consumers.

Takeaways

• 😀 Horizontal and vertical integrations are strategies aimed at strengthening monopolies, increasing market share, and achieving economies of scale.
• 😀 Horizontal integration refers to the merger of companies within the same industry to consolidate market power and improve profitability.
• 😀 Vertical integration involves merging with companies that are part of the supply chain, reducing costs and ensuring a more reliable supply of raw materials.
• 😀 Both types of integration can lead to more efficient resource use and management, enhancing overall business performance.
• 😀 An example of horizontal integration is a tire company merging with another tire company to dominate the market.
• 😀 Vertical integration could be a food company merging with its raw material supplier, such as a noodle company merging with a wheat supplier.
• 😀 The goal of both integrations is to increase market dominance, reduce inefficiencies, and improve product offerings.
• 😀 Integrations are not inherently harmful, provided they do not result in consumer harm, such as increased prices or reduced product supply.
• 😀 Governments should monitor integrated companies to ensure that market stability is maintained and consumers are not negatively impacted.
• 😀 If integration leads to more competitive pricing, better quality, and a more stable supply, it is generally considered beneficial for the market.
• 😀 The overall success of horizontal and vertical integrations depends on ensuring they benefit both the company and the consumers, with no disruptions to market dynamics.

Q & A

What are the two types of mergers and integrations discussed in the script?

The two types of mergers and integrations discussed are horizontal integration and vertical integration.

What is horizontal integration?

Horizontal integration is the merger of two or more companies in the same industry to strengthen market share or create a monopoly.

Can you provide an example of horizontal integration?

An example of horizontal integration is a tire company merging with another tire company, which helps increase market share and reduce competition.

What is vertical integration?

Vertical integration is the merger of companies that are part of the same supply chain, such as a food producer merging with a supplier of raw materials.

How does vertical integration help businesses?

Vertical integration can reduce costs and uncertainties in supply chains, leading to more efficient production and a more reliable source of raw materials.

What are the primary benefits of both horizontal and vertical integrations?

Both types of integration aim to strengthen market share, create economies of scale, improve management efficiency, reduce costs, and offer more varied products.

Is it always wrong for companies to engage in horizontal or vertical integrations?

No, horizontal or vertical integrations are not always wrong, as long as they do not harm consumers, such as through higher prices or disrupted supply chains.

What should happen if an integration harms the market or consumers?

If an integration harms the market or consumers, such as causing price increases or supply disruptions, the government should intervene by regulating or overseeing the companies involved.

What role does the government play in managing mergers and integrations?

The government plays the role of regulating and overseeing integrations to ensure they do not disrupt the market, harm consumers, or lead to monopolistic behavior.

What should be the outcome of a successful integration for consumers?

A successful integration should result in stable prices, a reliable supply of goods, improved product quality, and greater competition, ultimately benefiting the consumer.