Monopolies+(1-8)


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Monopolies:** Vertical Integration- Vertical Integration is a form of management control used in some companies. The company shares a owner and it uses a hierarchy. When a company uses Vertical Integration it is possible to achicheve a monopoly. The first person to use this method was Andrew Carnegie. There are three types of Vertical Integration. They are backward integration, forward vertical integration, and balanced vertical integration. In Backward integration the company sets up small companies to help produce some of their products. An example may be a car company that could own a tire company, metal company and a glass company. With those subsidiaries the car company is able to keep a constant supply of parts for their cars so that their final product has good quality.


 * Forward Vertical Integration**- the company makes subsidiaries that market products to customers. An example of that would be a movie studio that also owns movie theaters to show the movies.


 * Balanced Vertical Integration**- A company sets up subsidiaries that both supply them with inputs and distribute their outputs. An example of balanced vertical integration is a Hamburger maker that owns farms that has cows, chickens potatoes, and wheat. It would also own the factories that make the products. They would also own the distribution centers. [wikipedia, 1]


 * Horizontal Integration**- describes a type of ownership and control. Usually used by business and corporations that wants to sell a product in a few different markets. Horizontal integration is much more common in marketing then in production. Horizontal integration can occur when a firm in the same industry and same stage of production takes over or mergers with another firm in the same industry and same stage in production. When a monopoly is created its called Horizontal monopoly.


 * Mass Production and Buying in Bulk**- Mass production is production of large amounts of standardized products on production lines. Mass Production usually uses tracks or belts to move products down the line for assembly. It has a very high rate of production. Mass Production has a high machine to worker ratio. The company has a higher capital and spending is lower. But the machienes do most of the processes are very expensive so there has to be a good chance the product will succeed.

There are some advantages and disadvantages to mass production. Some advantages are faster production of the unit, smaller chance of human error, most tasks are carried out by machines, smaller labor costs. Some disadvantages of Mass Production are inflexibility about changing the product, not easy to satisfy individual tastes.