Achieving Market Power

To achieve market power, a company would need control over its supply to a particular market. A company can have synergy through pooled negotiating power and vertical integration. Disney has been able to dominate in these markets. Pooled negotiating power is when a firm has higher bargaining power with suppliers and customers. Combining resources such as theme parks, merchandise, and movies has created greater negotiation power with suppliers, distributors, and partners. Vertical integration is when a firm can expand by being its supplier or distributor. In other words, if the company owns more than one stage of the supply chain, it can achieve synergy through vertical integration. Disney has been able to own and operate the theme parks and create and distribute movie franchises. With this being a large share of their profit, they have achieved synergy in both market powers.