Question

If Facebook is to acquire a cybersecurity company, would this be considered a horizontal or vertical acquistion? why?

Answer 1

IT WILL BE CALLED AS VERTICAL ACQUISITION

Vertical acquisition is a strategy whereby a company owns or controls its suppliers, distributors or retail locations to control its value or supply chain. Vertical integration benefits companies by allowing them to control process, reduce costs and improve efficiencies. However, vertical integration has disadvantages, including the significant amounts of capital investment required.

In this case Facbook is in social and advertising platforms but every member of facebook has personlised accounts which requires security therefore acquisition with a cybersecurity company will attract more people since now Facebook is more secure than before.

THEREFORE IT IS A VERTICAL ACQUISITION

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