Horizontal&Vertical Integration and Co-operative

Explain: What horizontal integration is? Horizontal Integration is where an organisation develops by buying up competitors in the same section of the market e.g. one music publisher buys out other smaller music publishers. BBC. | Dragons' Den Definition: A situation when two firms in the same industry and at the same stage of production come together.	Benefits / PROS A company that seeks to expand through a horizontal integration can achieve economies of scale, economies of scope, increased market power or market share, reduction of production costs, reduction of competition and increases in other synergies.	Drawbacks / CONS A company that seeks to expand through a horizontal integration can achieve economies of scale, economies of scope, increased market power or market share, reduction of production costs, reduction of competition and increases in other synergies.
Explain: What vertical integration is? Commercial institutions try to combat the power of the BBC by becoming larger and creating vertical integration. This is where an institution has shares or owns each part of the production and distribution process. For example: Warner Bros Entertainment calls itself a fully integrated broad based entertainment company which owns film studios and the means to distribute the films as well as some of the cinemas in which they are shown. Warner Bros in itself is part of an even bigger conglomerate called Time Warner which is a huge media conglomerate institution which uses horizontal Integration to consolidate its power and profits.	A main advantage sought by companies that get into vertical integration is more control over the value chain. When retailers decide to acquire or develop a manufacturing business, they get more control over the production part of the distribution process. Similarly, when a manufacturer performs distribution or retailing activities, it has more control over the way the product is presented and at what prices it is sold in the market.	1. Balancing problems. Take for instance, a business requires the establishment of extreme upstream capacity for the assurance of having enough supply from downstream operations under any condition. The previous suppliers of the business may think of retaliating which can potentially endanger the production. 2. Flexibility decreased. Businesses that are previously involved with upstream or downstream investments will more likely result to the decrease in its flexibility. However, it will increase the flexibility in the coordination of vertically-related activities. 3. Market entry barriers. Market entry barriers are often the case when manufacturers control the access to raw materials or crucial components with scarce origin. Through vertical integration, they are able to limit the competition and possibly establish strong market position and allow protection of the business’ consumer base. Nevertheless, this could lead to anti-trust when regulators think that mergers alter market concentration. 4. Inability to increase product variety. If significant development within the company is needed, it will decrease the organization’s ability to increase its product variety.
Explain: What co-operative is? Media cooperative. From Wikipedia, the free encyclopaedia. 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.