Key words in media

Globalisation

Globalisation refers to how countries across the world are becoming more interconnected. This results in interrogation of economics and markets globally. An example of this in media would be the broadcasting company Viacom which are active in countries worldwide. Globalisation is essential in  a companies growth if it wishes to be successful. This is because if the company has a larger presence worldwide then they will be more renown. This will increase the amount of consumers in which the company have. Therefore, increasing sales.

Merger

This is when two companies merge together to make a much larger and more powerful company. An example of this in media would be the two companies sky television and British satellite broadcasting. These two companies merged in 1990 to create bskyb. A benefit of companies merging could be the potential to make the company more wide-spread. This is due to the fact that if two companies from different locations or countries merge then they will be situated in both places were the original companies were. This means that the company will become more recognized nationally increasing sales in various different locations. Also it is more financially efficient. This is because the merged company will have more funding for research and development resulting in the company being more profitable. A disadvantage could be the fact that is reduces competition. Therefore, one company could potentially gain monopoly power over the specific market. Mergers could also disadvantage the customers as it leaves them with less choice.





Takeover

Takeover refers to when one powerful company takes over another smaller one. Usually by buying out there stocks and becoming the majority shareholder or by simply buying the company out. This normally happens when the smaller company is struggling or not making profit. An example of this in media would be googles takeover of the mobile phone company motorola. This could be beneficial if the company that is taking over has more knowledgeable or resources for the specific product. This means that taking over the original company would improve the products, possibly raising public awareness therefore increasing profits. However the advantages and disadvantages of this process depend on the perspective in which you look at it from. For instance a takeover would cause employment cuts. Obviously this would be a disadvantage for employees. Although, it would be advantage for the company as a whole due to the fact they have to pay less wages. Another pro of a takeover would be the fact it increases the growth of the overall company. This can help globalisation occur within the company giving them a larger presence. However, the company may set a bad name for themselves if they continuously takeover smaller companies. This would effect the general public's perception of them. Therefore, reducing sales and lowering their profit margin.

Vertical integration

This is when companies expand there business into different areas. However they are different from there initial production path. An example of this would be the company apple who make many products ranging from phones to computers and t.v's. This method of integration can be beneficial to a company in many ways. Mainly due to the fact they are manufacturing a range of new products. This overall results in increasing the amount of products they sell which makes there company name more known. This obviously results in more profits being made as well as more business opportunities for the company. A con of vertical integration would be there consumers losing faith in the company. This is because they may ruin their brand name due to appearing as sell-outs. Also they may start making new products and dismissing there original ones which the public know an love. This could decrease sales and change public perception.

horizontal integration

This is similar to vertical integration however the company stays within there types of production. Although, they expand there company into other markets and companies. An example of this would be the broadcaster BBC who market different channels across the world but stick to media broadcasting. This is beneficial for the company as they can branch out into similar products within their industry. Due to the fact they are sticking to the same production path, the company would already be experienced in manufacturing them types of products. However, due to the fact they are staying within their own production path it could hinder diversity. This means that new innovative ideas will not come into the company. This would be a con as less original products will be produced by the specific business