1. II. THE STRUCTURE OF GLOBALIZATION
Market Integration shows the
relationship of the firm in a market.
Market integration as a process which
refers to the expansion of firms by
additional marketing functions and activities under a single
management.
Ex. Meat industry buys all the functioning plants needed for
running this meat industry.
2. MARKET ARE INTEGRATED IDEALLY HAVE THE FOLLOWING
FEATURES
Information travels quickly
Supply and demand in the two markets adjust very quickly due to
efficient mobility of goods.
Price adjustment in the two markets also takes place freely and
quickly.
3. TYPES OF MARKET INTEGRATION
Horizontal Integration
This occurs when a firm gains control of other firms performing
similar marketing functions at the same level.
Some marketing agencies combine to form a union with a view to
reducing their effective number and the extend actual competition
in the market.
Advantageous for the members who join the group.
Ex. Milk producers, Facebook, Instagram
4. Vertical Integration
It occurs when a firm performs more than one activity in the
sequence of the marketing process.
It is a linking together of two or more functions in the marketing
process within a single firm or under a single ownership.
A type of integration makes it possible to exercise control over
both quality and quantity of the product from the beginning of the
production process until the product is ready for the consumer.
It reduce the number of middle man in the marketing channel.
Ex. Netflix, Zara, Ikea, Wholesale, Processing, Amazon
5. Conglomeration Integration
A combination of agencies or activities not directly related to each
other.
It operates under a unified management be termed a
conglomeration.
Ex. Unilever, Nestle, Adami, Process vegetables
6. DEGREE OF INTEGRATION
Ownership Integration
This occurs when all the decision and assets of a firm are
completely assumed by another firm.
Ex. A processing firm which buys a wholesale firm
Contract Integration
This involves an agreement between two firms on certain
decisions while each firm retains it separate identity.
Ex. An employer and employee may often choose to work
according to an employment contract.
7. EFFECTS OF INTEGRATION
Integration is an attempt at organizing or coordinating the
marketing processes to increase operational efficiency and acquire
greater power over the selling or buying process.
Middle men are reduced and followed by them.
Price also will not increase further if market is well integrated.
Gaining a larger share of market and higher profit.
Lowering the cost through achieving operational efficiency.
8. THE RISE OF GLOBAL COMPANIES
Global corporations are inseparable to globalization.
Types of Global Corporation
International companies
Are importers and exporters, typically
without investment outside of their home
country.
9. Multinational Companies
The investment in other countries, but do
not have product offerings in each
country.
They’re more focused on adapting their
products and services to each individual
local market.
10. Global Companies
Invested in and are present in many countries.
They market their products and services to each
individual local market.
Transnational Corporation
An enterprise that engages in activities which
add value in more than one country.
11. BRICS Economies
Brazil, Russia, India, China, and South Africa.
The most dynamic sector of global corporate
growth.
A foreign direct investment is an investment in a
controlling ownership in a business in one country by an entity based in
another country.
BRICS economies represent a primary force in both global production and
consumption.
Unaffected by the US and European Markets in 2007.
12. General Agreements on Tariffs and Trade (GATT)
It was establish in 1947 and was a forum for the meeting of
representatives from 23 member countries.
It focuses on trade goods through multinational trade agreements.
World Trade Organization (WTO) 1993
Located in Switzerland with 152 member states as of 2008.
It is an independent multinational organization responsible for
trade and services, non-tariff barriers.
13. Organization of Petroleum Exporting Countries (OPEC)
1960 OPEC was comprised of Saudi Arabia, Iraq, Kuwait, Iran and Venezuela.
OPEC was formed, the member countries increase the price of oil in the pass
had a relatively low price and had failed in keeping up the inflation.
United Arab Emirates, Algeria, Libya, Qatar, Nigeria and Indonesia are
today’s member.
NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)
NAFTA is a free trade pact between the United States,
Mexico, and Canada created on January 1, 1994.
North American Free Trade Agreement (NAFTA)
14. CAPITALISM AND SOCIALISM
Capitalism is a system in which all natural
resources and means of production are privately
owned.
It emphasizes profit maximation and competition
as the main drivers of efficiency.
15. Socialism
The property is owned by the government and allocated to all
citizens, not only those with money to afford it.
Socialism emphasizes collective goals expecting everyone to work
for the common value on everyone’s basic needs than on
individual profit.
Communism
It is a political and economic system in which all members of a
society are socially equal.
16. POLITICAL IDEOLOGY AND GLOBAL IMAGINARIES
Ideology
A system of widely shared ideas, patterned beliefs, guiding norms
and values, and ideals accepted as truth by some groups.
Serves as guide and compass for social and political action.
First coined by Antoine Destutt de Tracy in the late 18th century.
17. Newly Industrializing Countries (NIC’s)
7 NIC’s including China, South Korea, Mexico, Brazil, India,
Indonesia & Thailand in order.
China
2nd largest exporter of manufactured goods
Brazil & India rank 9th& 10th.
Asian NIC’s manufacturing growth is highest
18. Asian “Tigers”
Largest gains in manufacturing growth:
*South Korea
*Hong Kong – separate political entity from China
*Taiwan
*Singapore
*Malaysia
*Thailand
All have access to Ocean Port shipping for Export
19. GEOGRAPHIES OF OFFICE EMPLOYMENT
Decentralization
Back-office functions means rote jobs with
job security.
Outsourcing Temporary workers with no
rights.
Clusters of specialized Offices
Offshore financial centers
20. Future Geographies
*Availability of resources
*Expansion of world economy
*Globalization of industry
Transportation technologies
*High-speed rail systems
*Smart roads
*Smart cars
21. REASONS FOR MARKET INTEGRATION
*To remove transaction costs
*Foster competition
*Provide better signals for optimal generation and consumption
decisions.
*Improve security of supply
22. B. GLOBAL GOVERNANCE
One World
A nearly 8 billion souls living on this
hurtling through empty space.
Many peoples with different ethnicities, languages, beliefs,
religions, traditions, resources, capacities, knowledge and desires.
A long history of conflicts but we have nevertheless created a
global civilization based on ever more sophisticated ways of
cooperating amongst ourselves.
24. SOCIAL PROBLEMS
An inability to maintain security and
privacy.
Unsustainable healthcare costs.
Declining infrastructure quality.
Automation & growing unemployment.
An increasing lack of government transparency.
25. PROBLEMS OF DEMOCRACY
Declining public confidence in
governments & their leaders.
Institutions are believed to be
incompetent, unethical or corrupt.
A decline in the quality of public debate
Elected representatives & increasingly centralized decision-
making.
26. International Agreements
Are treaties signed by a number of states that
establish global rules of conduct.
States that break these rules are called rogue states (North Korea,
Iran, Iraq, Syria)
International law
The collection of rules and regulations that define the rights and
obligations of states.
27. PROBLEMS OF GOVERNANCE
Governments no longer have all the
knowledge, resources or power to
achieve their goals.
Governments lack collaborative
cultures to solve problems.
Governments lack the practical abilities to work with others b/c
they lack the mechanisms to meet the challenges of cooperation.
28. A Way Forward
You never change things by fighting the
existing reality.
To change something, build a new model
that makes the existing model obsolete.
29. NEW MODEL OF GOVERNANCE
Governance is based on the shared ownership of all citizens in
both problems and solutions.
Governance activities utilize the knowledge and practices of
collaboration and domination.
Rather than representative democracy, governance is based on
direct citizen involvement and collaboration.
30. DID YOU KNOW?
Coca-Cola was originated in 1886 by an
Atlanta pharmacist, John S. Pemberton
originally his drink as a tonic for most
common ailments, basing it on cocaine
from the coca leaf and caffeine-rich extracts of the kola nut; the
cocaine was removed from Coca-Cola's formula in about 1903.
31. The League of Nations
was a international organization founded
after the Paris Peace Conference, 1919.
The League's goals included disarmament,
preventing war, settling disputes between
countries through diplomacy and improving global welfare.
The four permanent members were Great Britain, France, Italy,
and Japan.
32. QUOTES OF GLOBALIZATION
It has been said that arguing against globalization is
like arguing against the laws of gravity.
Kofi Annan
33. State Market Integration and give an example of Market
Integration?
Does governance affects the economy of the country? Justify
your answer
Sketch a structure of Globalization.
Distinguish Market Integration to globalization.
Compare the different between Socialism and Communism.
