Vertical Integration for American Economic Review- myassignmenthelp

Question: Discuss about theVertical Integration for American Economic Review. Answer: Introduction: Vertical integration is a strategically implied process, which is usually adopted by a business organizations or companies for expanding their operations. This usually implies that the company or organization involves tries to own the various process itself without relying on the vendors for the job. This report discusses about the vertical integration processes in the Indian premier league (IPL). The type of vertical integration used in IPL is also discussed in the report. Discussion: The examples of a vertical integration strategy are when a manufacturing company or business organization wants to acquire their suppliers and vendors and wan to expand the business. This reduces the time required to ship the products to the external vendors and the time to ship the raw materials from suppliers. This also reduces the cost for operation in the company involved. Upward vertical integration: The upward vertical integration is done by a company who wants to buy their suppliers (Lee 2013). This reduces the time required for contracting and time for transportation of the raw materials. In the case of IPL, the franchisers are the suppliers here. The businesspersons are responsible for buying their intended team via a bidding process. The process involved allotting a special sum for buying the players for a team. In its day of commencing, Mumbai was the highest grossed franchisee owned. Downward Vertical integration: This type of integration is applied when the company involved wants to buy the vendors or their product suppliers to minimize the cost involved in contracting with them and the time required for transportation (Chang and Iseppi 2012). In case of IPL, the vendor is the broadcaster who is supposed to sell media rights. On the days of opening, IPL marketed with Sony Entertainment television for marketing which made a deal of 15million$. This helped the IPL to grow and get the fans all over the country. Conclusion: Thus, the report concludes that the vertical integration process done in IPL helped to get the required promotion as well as the intended brand value that it represents in the modern days. Referencing: Chang, T.F.M. and Iseppi, L., 2012. EU agro-food chain and vertical integration potentiality: a strategy for diversification?.Transition Studies Review,19(1), pp.107-130. Lee, R.S., 2013. Vertical integration and exclusivity in platform and two-sided markets.The American Economic Review,103(7), pp.2960-3000.