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Advantages of Horizonatal Combination

Advantages of horizontal combination can be discussed under the following points.   
     (i) Removing of harmful competition: By virtue of business combination unsecessary harmful competition amongst same line of business can be removed.
     (ii) Gaining services of specialists: In case of Horizontal combination, the combining units of business can gain the services of specialists. Because collective financial resources and managerial efforts can provide this specialist service t5o the combined businesss undertaking.
     (iii) Benefit of large scale of production: Through the horizontal combination the benefit or economics of large scale of production can be obtained. Because the all combining unit can provide necessary finance as well as other management, operational and controlling effort necessary for large scale of production.
     (iv) Improvement of Research and Development work: Now-a-days, research and development work is immensely important for the overall development of quality of business, product and service which is possible through combination. It is because of the fact that combining undertaking can easily sponsor the quality scheme and programme of research and development.
     (v) Balance between demand and supply: In the combination balance is made between demand and supply. The combination can solve the problems of less or more production.
     (vi) Reduction of per unit cost: Total cost of transportation communication distribution and other operational cost are distributed among large number of production unit. That is why the unit cost can be minimised in case of business combination.
     (vii) Market control: Combining business units can easily paly powerfull control over market in fixation of price and profit.
     (viii)External economics: In addition to transportation, the combining units of business can enjoy many external economics such as advertisement, marketing services, banking services etc.
     (ix) Standardization of product: It is easily possible to standardize the products or goods of the combining unit.


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