Question

what factors cause a construction company to expend horizintally or vertically ?

Answer 1

The factors which affect a construction company to exapnd horozontally or vertically depends on the companies vision and mission and the circumstances.

Expanding vertically means to focus on being capable of doing a work with their own sources otherthan renting or getting help from other service providing companies. For example a construction company buying new equipments of there own instead hiring from outside.

Vertical expansion may improve the efficiency and capability of their works and increase total worth of the company but it requires more investment.

On the other hand expanding horizontally is beneficial if a company is planning to expand to a new country by aquiring a preexcisting company or giving contracts to other service providing companies when huge investments are difficult.