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Essay / Research Paper Abstract
In February 2004 Comcast made a bid for Disney. The acquisition would have added to the Comcast empire and allow them growth that their current structure could not facilities. This 5 page paper looks at he advantages and motivation for Comcast and how they may create value from acquiring Disney. The paper then considers the acquisition attempt from the perspective of Disney, the advantages and disadvantages and how, in the long term, the shareholders may, or may not gain value from this acquisition. The bibliography cites 1 source.
Page Count:
5 pages (~225 words per page)
File: TS14_TEcomcast.rtf
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Unformatted sample text from the term paper:
February 2004. The attempt to acquire Disney by Comcast may be seen as an attempt at horizontal integration. To determine if there is horizontal or vertical integration the supply chain
has to be considered. If the acquisition is at a different part of the supply chain, such as a supplier to the company, then this may be seen as a
vertical acquisition, and many of the benefits will be with the potential increased efficiency a value chain. However, where the acquired company is at the same stage of the value
chain, as can be seen with both Disney and Comcast, both are television channel operators, and as Disney is on the same level as this there is horizontal integration.
There are some vertical elements, for example, Comcast as a cable operator also buys in some programming, and may also create a marketing arena for marketing theme parks and other
Disney sales, but these are minor point when the main operations of Comcast are considered. The motivations for the sale also appears to be to increase market share. It
is generally agreed that Comcast have reached the limits of the growth in terms of their cable operations, and if they want to increase market share they will have to
make acquisitions. Increasing market share in the same market also indicates horizontal integration. Question 2 If the acquisition is eventually successful then Comcast will need to create value
from the acquisition to justify the transaction. The shareholder will want to see an increased value through the integration and synergies that can be created, such as reducing distribution costs
between the television operations of the two companies and also make use of the increased potential of economies of scale. Where this occurs and earning increase, or net profits increase
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