Which statement best describes a Horizontal Business Model?

• A. Involves expanding into every stage of the value chain
• B. Distributes production across many suppliers
• C. Focuses on a single area of the value chain
• D. Eliminates the concept of a value chain

Answer: (C)

The concept being tested is how a business model uses the value chain. A horizontal model concentrates on one part of the value chain rather than spanning multiple stages. By focusing on a single area, the company can optimize that stage across different products or markets without owning or controlling other stages like suppliers or distributors. This is what makes it horizontal.

Expanding into every stage of the value chain is vertical integration, which is the opposite of a horizontal approach. Spreading production across many suppliers describes sourcing diversity rather than the structural focus of the model. The idea that the value chain doesn’t exist isn’t accurate—the value chain is simply the sequence of activities a company performs.