Back to blog

Everything You Need To Know About The Horizontal And Vertical Business Strategies!

horizontal and vertical business strategies

Business is a compilation of policies, procedures, strategies and what not! We have talked about it so many times that building a business takes a lot. However, be it a product or public service business strategies are undoubtedly the foremost things to practice. Just like stagnant water doesn't support life similarly, a still business doesn't support growth, and no advancement happens without the execution of strategies.

With emerging roadblocks, corporations find it difficult to achieve growth in all aspects. So, how business strategies help? Well, different brands use different tactics to raise the performance of their business, but in recent times, horizontal and vertical business strategies have been very famous with their results. Many leading global brands are making most of their business growth with these strategies.

So, moving with this latest craze, we present you with everything you need to know about horizontal and vertical approaches. Read on!

learn about horizontal and vertical business strategy

What Is Horizontal Strategy?

A horizontal growth strategy is all about being in the new markets. It focuses on acquiring a similar organisation in the business. Under this strategy, companies can opt for increasing the size, reduction in competition, and diversification of products. Moreover, it also focuses on expanding products/services to new markets, new geographies or new domains.

For Instance, a store decides to merge with a similar store in another country to start its operations abroad. The most notable real-life example of this strategy is what UBER has done. UBER launched its services initially in one city only and later reached out to different locations across America and worldwide.

Apart from this, the company introduced on-demand solutions for the users in a distinct business area through 'UberEats', making its way in the food industry. Under this strategy, businesses usually try to ignore third-party sources for all types of business activities.

What Is Vertical Strategy?

vertical business strategy

Well, talking about this strategy, it is all about scaling products/services in an existing market. It is also known as a traditional strategy for any startup. By using a vertical business strategy, corporations go deeper into their current interest as they explore chances to increase the demand for the product.

Companies can either add more features to the existing product or introduce new commodity to complement the fundamental product value. This traditional strategy has many examples like Instagram is not only a photo-sharing app the platform now has tools of video sharing, filters, stories, and what not!

Similarly, Snapchat also works on the same strategy. The app started as a person-to-person photo-sharing app has now many more features like chat, stories, lenses, etc.

Horizontal Vs Vertical- Which Is The Best?

horizontal business strategy

Well, there is no definite answer to what strategy suits the best for your business. It generally depends on your purpose of using tactics for your business. While it is significant to take your inspiration from notable examples, it's also true that there is no readymade solution for a perfect strategy working for your business.

On one end, where the horizontal approach is highly profitable with a long-term rate of return, the other end details the unique challenges in the new markets under this strategy.

Similarly, the vertical strategy not only helps as the most popular growth strategy but also poses challenges like more money requirements and workforce capacity issues.

In a nutshell, your growth strategy speaks about your business and your choices that will help you to stay in the longer run. So, choose wisely!

Visit us at Higgle to start a business with zero investment. Follow us on Instagram for the latest updates.