1989 Detroit Free Press Profits Essay Example | Topics and Well Written Essays - 500 words

1989 Detroit Free Press Profits - Essay ExampleAfter the merger, the ii day-by-day newspaper publishers should result in making huge amounts of profits since the level of competition impart greatly reduce. This willing be actiond when the two companies share the precedent sales data and put more emphasis on the particular variables that previously had contributed to either companys downfall. In addition, the geographical coverage of two companies will increase since the areas covered by one of the dailies will also be covered by the area. Moreover, the come of people who subscribe to the dailies will increase since one company will now share the previous market that had been divided into two. However, the unavailability of competition will lead to a new high monetary value of advertising from companies since the demand for advertising will remain constant and the supply of advertising institutions will reduce. Moreover, the sellers of the newspaper will increase the price des pite the printing cost and operating expense reducing collect to advantages brought about by greater economies of scale. This means that the now big company can bid for larger orders that save money. Bidding larger orders also advances purchasing power, since there is a greater possibility for negotiating with advertisers (Samuelson & Marks, 2012).The two companies cut the advertising rates substantially before the merger since they no long-lasting had to spend a lot of money to achieve a high market share. The high level of competition in the midst of the two companies drove them to incur a lot of cost in a move to achieve a high-end market and try to attract high-level business that would advertise in their newspapers. Moreover, a high customer base will increase the value of the company and thus scoop a big value during the merger. After the merger, the two companies now own the entire market share and no longer require incurring huge costs to achieve the