Ownership

Define the following and given an example of a company that does this eg Apple for vertical integration:

(This is part 1 of your “ownership of the media sector” power point. Add these two power points together then add it to your blog - after completing this try and add more of these technical terms and definition to your case study - this will gain you merits and distinctions)

Private ownership is when an individual is owned by him/her self.

The benefits and weaknesses of private ownership are that private companies can react more quickly to challenges and opportunities without going through exhaustive decision making processes yet private companies haven’t got a chance of growing their business unlike public companies.

Private companies are less expensive as it requires very less paper work and very limited shareholders.

Private companies are more secure because their business is kept confidential as it is a private company which is less interacting with media or press.

Public Ownership is when a certain company is controlled by the government.

The benefits and weakness of public ownership is that there are able to raise funds.

A disadvantage is that the cost is huge.

Multinational is when a certain company is owned in multiple countries.

An example of this is the BBC, the BBC is shown in the USA as well.

For each one look at benefits and weakness

An independent ownership is when a company is privately owned.

Independent retailers include Blaze (cards), The Shop With No Name (clothes), Hudson's (food) and Urban Village (memorabilia).

Advantages: There are no restrictions on who, how or where an entrepreneur should set up his/her business. The freedom to do what one wants to do is the biggest advantage in this form of business. It can be extremely fulfilling.

Disadvantages: Because of the ease and flexibility of getting started, there can be a lot of competition in a particular area for a certain type of customer. Every business decision rests on the owner(s). There is no branding, no preset guidelines and a great deal of risk in this business model.

A conglomerate ownership is an umbrella of products, this includes radio, TV, film & print.

An example of this is the BBC

Disadvantages: -The extra layers of management increase costs. -Accounting disclosure is less useful information, many numbers are

disclosed grouped, rather than separately for each business. It is easier for management to hide things.

Advantages: -Diversification results in a reduction of investment risk.

When the products of both companies are similar.

Advantages: -Lower costs -Increased Market Power

Disadvantages: -Costs -Increased work load

Merger of companies at different stages of production

Advantages: -Some economies of scale such as risk bearing economies,

financial economies. Lower costs could lead to lower prices for consumers.

-Firm not subject to losing control of supply.

Disadvantages: -Vertical mergers will have less economies of scale

because most of the production is at different stages of production. There is still scope for monopoly power. Also a vertical merger can lead to monopsony power.