horizontal and vertical intergration and cooperatives


Explain:
 
What horizontal integration is?
 
This is where a production company expands into other areas of one industry. This means that the company can develop in a particular area of production or they can buy out another company that deals with these areas.
Benefits / PROS
 
-It helps to create more money and makes the company more popular among readers.
- The more technology literate people will read the magazine online, so horizontal integration helps to reach a wider audience.
 
Drawbacks / CONS
-          One drawback of Horizontal Integration is that misfortunes from a recently obtained business may cut into the benefits from an existing one. Hence new acquisitions must be made just after cautious investigation.
Explain:
 
What vertical integration is?
 
This is when the production company has the ownership of the means of production, distribution and exhibition of the film by the same company, because of this they receive all the profit.
-          Increased competitiveness.
 
-          Greater process control
 
-          Increased market share.
 
-          Increased supply chain coordination.
 
- Decreased cost.
-Vertical Integration can also have some setbacks such as it reduce operational flexibility and limit access to the best suppliers.
-Suppliers may order less than the lowest cost-efficient scale needed to produce the product
Explain:
 
What co-operative is?
 
Media cooperatives are a form of cooperative that report on news based on the geographic location of their membership, or the general interests of the membership. Often they are a form of alternative media, critical of capitalism, with left-wing stances.
-          High viewership and broad reach. Possibly still the highest reach medium.
-          High impact.
-          Demographic targeting is possible with opportunities to target by interest.
 
-          Expensive media buy.
-          Expensive production.
-          Declining ratings and decreasing audience.
-          People can channel surf and skip commercials, or edit them out altogether.
-          Poor geo-targeting, although using local channels can solve this to an extent

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