MARKET

INTEGRATION
TERMS AND DEFINITIONS

01 Trade- The exchange of goods and services between

countries.

Cross-border trade - The exchange of goods and services

02 between countries across their national borders.

Harmonization - The process of aligning policies and

03 standards between countries to reduce trade barriers and
increase economic efficiency.

04 Tariffs - Taxes on imports or exports of goods.

Quotas - Limits on the amount of a particular good that

05 can be imported or exported
TERMS AND DEFINITIONS

Supply chain - The network of organizations, people, activities,

06 information, and resources involved in the production and
delivery of a product or service.

07 Trade liberalization - The reduction or elimination of

government-imposed barriers to trade, such as tariffs and
quotas.
Protectionism - The policy of shielding domestic industries
08 from foreign competition through tariffs, quotas, and
other trade barriers.

09 Interdependence - The state of being mutually dependent

on each other.

Trade barriers- in market integration refer to any

10 restrictions or obstacles that prevent the free flow of
goods, services, and factors of production across national
border.
WHAT IS
MARKET INTEGRATION?
 01
Markets of goods and services Prices of related goods and
are somehow related to one
another. 02
services sold in a defined
geographical location also
begin to move in some sort of
similar pattern.

Prices of related goods and

03
Market integration refers to
the degree to which different
markets are connected or
linked together.
04
services sold in a defined
geographical location also
begin to move in some sort of
similar pattern.
 It is one of the largest
beverage companies in
the world, with a market
capitalization of over
$230 billion.

Amazon has a market It is one of the largest

capitalization of over $1.5 automotive companies
trillion and operates in in the world, with a
over 180 countries market capitalization of
globally. over $40 billion.
HISTORY OF MARKET
INTEGRATION
Agricultural
Revolution
It is when the time people
learn to domesticate plants
and animals.
HISTORY OF MARKET
INTEGRATION
Industrial
Revolution
It is the time when the rise of
industry have came with new
economic tools like steam
engines, manufacturing, and
mass production.
HISTORY OF MARKET
INTEGRATION
Information
Revolution
It is the period of things,
that sharing knowledge and
adapting to new procedures
continued to growth
through technology.
FORMS OF
PREFERENTIAL
TRADE
AGREEMENT
Free Trade Area
An agreement that concerned

“
with removing tariffs, and
regulations that are applied to
member countries who trade
with each other.
Customs Union
Similar to Free Trade Area, also removes

“
tariffs between its members, but it also sets
up common external tariff to non-members
on imported and exported goods.

Usually, countries participating in customs

unions share common trade and
competition policies.
Common Markets
Where group of countries with a common

among members. “
external tariff, no internal tariffs and
coordinated laws to facilitate exchange

It provides for free movement of labour

and capital among the members.
Economic Integration
Agreement

“
Agreement between two or more nations to
allow goods, services, money, and workers to
move over boarders freely.

It extends free movement of money and

workers between member countries.
Regional Trade
Agreements
“
RTAs are PTAs that are
restricted to a specific
geographic region.
TYPES OF MARKET
INTEGRATION
 Horizontal
This occurs when firms at the
same stage of production
merge or acquire one another.

01
• Amazon
• Walt Disney
• Coca Cola
 Vertical
This occurs when firms at
different stages of production
merge or one firm acquires its

02
suppliers or customers.

• Apple
• Walmart
• Ford
 Conglomerate
Integration
This occurs when firms in
unrelated industries merge or

03
acquire one another.

• Samsung
• Toshiba
• General Electric
 Regional
Integration
This occurs when countries in
a certain region agree to

04
reduce trade barriers and
coordinate economic policies.

• Nestle
• Unilever
• Carlsberg
 Global
Integration
This occurs when countries
throughout the world reduce

05
trade barriers and coordinate
economic policies.

• Nike
• McDonalds
• Coca Cola
• Ford
 Functional
Integration
This is seen as a form of vertical
integration in which firms

06
integrate their production and
distribution processes to achieve
greater efficiency.

• Johnson & Johnson

• Intel
• P&G
 Brain drain

Social Distraction

DISADVANTAGES
Exploitation
OF MARKET
INTEGRATION
Inflation

Dependence on
Foreign Workers