Insusrty intergration
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Vertical integration in industries like film and gaming occurs when a company controls multiple stages of production, such as a studio that controls production, distribution, and theaters. Horizontal integration in gaming allows developers to work on multiple games at once. The pros of vertical integration are increased credibility, differentiation, and avoiding shut out from suppliers, while the cons are linking to unprofitable businesses and reduced flexibility. Horizontal integration pros are lower costs, more market power, and shared resources, while the cons are increased costs, workload, and responsibilities.
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Insusrty intergration
- 1. Industry integration, pros and cons
- 2. Horizontal and vertical integration Vertical integration is the process for example in film industries a certain part of it goes from Production studio to distribution to cinemas. However for gaming it can go from console manufacturer to games developer to games publisher. Game developers can have a horizontal integration where there can be more than one.
- 3. Pros and cons (vertical integration) Pros Increased ability to create credibility for new products. Can create differentiation through coordinated effort. Avoid getting shut out of the marketing for rare inputs Cons May link to unprofitable adjacent businesses Reduces strategic flexibility due to being ‘’locked in’’ to a business. Obsolete processes may be perpetuated.
- 4. Pros and cons (horizontal integration) Pros Reduction in cost. Increased market power. Economics of scope: sharing resources common to different products. ‘’synergies’’. Cons Costs Increased work load. Increased responsibilities