since I find horizontal and lateral quite similar
Get Active in Our Amazing Community of Over 451,000 Peers!
Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Case Partners to connect and practice with!
Can you take a typical example about horizontal ,concentric and lateral products
Overview of answers
Upvotes
Best answer
Hi Ngô!
Here are some typical examples of these product diversification strategies:
Concentric is the simplest, it's basically companies selling similar products in almost the same customer segment, for example, a company producing desktop computers getting into laptop business.
Horizontal means companies getting into a different product segment, but predominantly keeping the same or similar customer segments, for example, a computer company getting into tabs or anything connected to computing devices.
Lateral (conglomerate) is the toughest, this is where companies get into a completely unrelated product, for example, a computer company getting into producing cars.
Do you have any further questions?
GB
(edited)
Was this answer helpful?
Honestly, I have never ever heard these terms used in either casing or the business/strategic consulting world. Much more important would be the concept vertical/horizontal integration of companies.
That being said, here are the examples:
Concentric: Desktop manufacturer selling laptops, mouses, keyboards to their existing desktop customers. (i.e. it's something my customers want AND something I should intrinsicly be good at producing)
Horizontal: Desktop manufacturer selling chairs to their existing desktop customers (i.e. it's something my customers want, BUT something I don't necessarily know how to produce)
Lateral/Conglomerate: Desktop manufacturer selling cars to non-current customers (i.e. it has nothing to do with my current customers AND it's not something I'd be naturally good at producing).
Quite obviously, Lateral/Conglomerate moves are pretty silly, risky, and capital-intensive.
Was this answer helpful?
Hello!
For consulting cases, it´s enaguh to know the differences between horizontal and vertical.
Cheers,
Clara
Was this answer helpful?
Hi Ngo,
Honestly, I have never ever heard these terms used in either casing or the business/strategic consulting world. Much more important would be the concept vertical/horizontal integration of companies.
That being said, here are the examples:
Concentric: Desktop manufacturer selling laptops, mouses, keyboards to their existing desktop customers. (i.e. it's something my customers want AND something I should intrinsicly be good at producing)
Horizontal: Desktop manufacturer selling chairs to their existing desktop customers (i.e. it's something my customers want, BUT something I don't necessarily know how to produce)
Lateral/Conglomerate: Desktop manufacturer selling cars to non-current customers (i.e. it has nothing to do with my current customers AND it's not something I'd be naturally good at producing).
Quite obviously, Lateral/Conglomerate moves are pretty silly, risky, and capital-intensive.
Was this answer helpful?
Content Creator
#1 MBB Coach(Placed 750+ in MBBs & 1250+ in Tier2)| The Only 360 coach(Ex-McKinsey + Certified Coach + Active recruiter)
208
Meetings
7,144
Q&A Upvotes
74
Awards
67 Reviews
