What is a horizontal alliance?

A horizontal alliance is accurately defined as a partnership between competing organizations. This type of collaboration occurs when two or more companies at the same level within an industry, often direct competitors, come together to achieve common goals while maintaining their independence. By forming a horizontal alliance, these organizations can share resources, knowledge, and outputs to enhance their competitive edge, address market challenges, innovate services or products, and reduce costs through economies of scale.

This strategic partnership allows for the pooling of resources and capabilities, which can lead to improved market positioning and innovation that might be difficult to achieve independently due to constraints such as limited capital or capabilities. In healthcare, for instance, competing hospitals might form an alliance to improve patient care or share medical research findings, ultimately benefiting both organizations and their patients. This is a strategic response to the demands of the market that compels organizations to collaborate rather than solely compete.