Hi Guys,
Today I will be looking at Horizontal and Vertical Integration as well as a few key media terms that I have found out about
Parent Company = A large company that can absorb other small companies to expand its empire and ultimately increase profit
Subsidiary Company = A small company which is owned by another large company
Conglomerate = A group of companies owned by one large company which may have a diverse variety of media interests
Vertical Integration= A conglomerate owning more than one step in the supply process or value chain
Horizontal Integration = A number of companies in the same stage of the production process owned by one conglomerate
Vertical Integration
An example of Vertical Integration would be a situation when two firms in the same industry but at different stages of production come together to help create the film. For example Production Company, Marketing Company, Distribution Company and then Exhibition Company all play apart in making a film and need each other skills to make the film be successful
Horizontal Integration
When a parent company owns lots of companies at different stages of production. Horizontal Integration is where parent companies own smaller companies at the same stage of production.
Wow now I know the difference between the two do you?
Michael
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