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A corporation may purchase interest in another company in the same industry to enter a market. An example of this is Estee Lauder. They purchased shares MAC cosmetics as a way of entering a much younger, hipper market. In this way, they broadened their target market to includetwo market segments, without the added costs of starting a business from scratch. Such a purchase is known as ahorizontal acquisition,as both companies are involved in the same activities.

An example of avertical acquisitionwould be a company purchasing another company in the same industry, but involved in different activities. For instance, when Second Cup purchased shares in The Great Canadian Bagel Company, they were acquiring shares in a company with a complementary product - bagels and coffee are a natural complement to each other.

• IS APPLE INVESTING IN DELL - HORIZONTAL OR VERTICAL