Structure of media organisations:
Horizontal Integration
What is Horizontal Integration?
Horizontal Integration is the acquisition of additional business activities that are on the same level of the value chain in a similar or different industries.
Examples:
  • The Standard Oil Company buying 40 refineries
  • An automobile manufacturer buying a sport utility
  • Vehicle manufacturer
  • A radio station that also owns a newspaper and magazine
 
Advantages of Horizontal Integration:
  • Economics of Scale: Selling more of the same product in different parts of the world
  • Economics of Scope: Sharing resources common to different products. “Synergies”
  • Increased Market Power
  • Reduction in cost
Disadvantages of Horizontal Integration:
  • Costs
  • Increased Work load
  • Increased Responsibilities
  • Anti-trust issues
  • Creating a monopoly
 
Vertical Integration Organisation Pros and Cons
What is Vertical Integration?
The combination in one firm of two or more stages of production normally operated by separate firms.
Examples:
  •  An example of vertical integration is a store like Target ( An American retail store) which has its own brands. It owns the manufacturing, controls the distribution, and is the retailer. Because it cuts out the middleman, it can offer a product like the brand name product, but at a much lower price.
     
    Example Shops:
  • Morrisons
  • Apple
  • Mc Donald’s
     
     
 
Advantages of Vertical Integration
  • Reduce transportation costs if common ownership and results in closer geographic proximity 
  • Improve supply chain coordination
  • Provide more opportunities to differentiate by means of increased control over input
Disadvantages of Vertical Integration
  • Inability to increase product variety. If significant development within the company is needed, it will decrease the organizations ability to increase its product variety
  • Flexibility Decreased. Businesses that are previously involved with upstream or downstream investments will more likely results to the decrease in its flexibility. However, it will increase the flexibility in the coordination of vertically-related activities.
     
Co-operative integration organisations pros and cons
 
What is Co-operative integration organisations?
A cooperative also known as co-operative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically- controlled enterprise.
 
 
 
 
 
 

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