Valentine’s day is not for couples only.

It also
includes remembering and empowering love from our
family, friends, and most importantly, the love for
Ourselves. – Sir Morell 

HAPPY
VALENTINES
DAY!
1. It is a term used to describe the changes in societies and world
economy that result of cultural exchange.
a. Liberalization c. Globalization
b. Internalization d. Culturalization

2. This is the Metaphor used by our theorist that refers to the

barriers that prevent or make difficult the movement of things.
a. Solid c. Gas
b. Liquid d. Flow
3. It refers to the interconnected worldwide economic activities
that take place between multiple countries.
a. Global Economy c. Cultural Globalization
b. Ecological Economy d. Regional Globalization.

4. It is the removal or reduction of restrictions or barriers on the

free exchange of goods between nations.
a. Trade Liberalization b. Tariff
5. It is the policy that imposes required fees on every
export and import products to shield their domestic
productions.
A. Trade Liberalization B. Protectionism
The Contemporary World
MARKET INTEGRATION
Instr. Morell B. Caña, RPm
The Philippine’s Economy
in 2 Minutes

https://www.youtube.com/watch?
v=bWkn2nzB8HA&ab_channel=GlobalEconomics
KEY CONCEPT
• MARKET INTEGRATION

• INTERNATIONAL FINANCIAL INSTITUTIONS

• Bretton woods system
• GATT | General Agreement On Tariffs And Trade
• WTO | World Trade Organization
• IMF | International Monetary Fund and the World Bank

• HISTORY OF GLOBAL MARKET INTEGRATION

• Agricultural Revolution & the Industrial Revolution
• Capitalism and Socialism
• Information Revolution

• GLOBAL CORPORATIONS
• Transnational Corporation/Multinational Corporations

• SUTAINABLE DEVELOPMENT
 MILLENNIUM
MARKET DEVELOPMENT
INTEGRATION GOALS
 FILIPINO POVERTY

100,534 POVERTY LINE

PHP/yearly or
275 PHP/ Day POVERTY
THRESHOLD
Poverty is a state or condition in which a person or
community lacks the financial resources and essentials for
a minimum standard of living. Poverty means that the
income level from employment is so low that basic human
needs can't be met.
1. FOOD
2. Safe Drinking Water
3. Sanitation Facilities
4. Health
5. Shelter
6. Education
7. Information
MARKET INTEGRATION
 MARKET INTEGRATION
• Market integration occurs when prices among
different locations or related goods follow similar
patterns over a long period of time.

• Groups of goods often move proportionally to each

other and when this relation is very clear among
different markets it is said that the markets are
integrated.

• Indicator of how much markets are integrated to

each other.
HORIZONTAL INTEGRATION
GOALS :
- Some marketing agencies combine to form a
union to reduce their effective number and
the extent actual competition of the market.
 Increasing in size
- This occurs when a firm or agency gains  Creating economies of scale
control of other firms or agencies performing
similar marketing functions at the same level
in the marketing sequence  Increasing market power over
• The merger of two companies at similar
levels in the production supply chain is
distributors and suppliers
known as horizontal integration.
 Increasing product or service
• The transaction allows companies to expand
their market share and cut costs with
synergies. differentiation
• These integrations can include companies in  Expanding the company's market
different industries, but they are the opposite of
vertical integrations, which include companies at
difference production supply stages. or entering a new market
 Reducing competition
Facebook and Instagram
One of the most definitive examples of horizontal
integration was Facebook's acquisition of Instagram in
2012 for a reported $1 billion.

• Both Facebook and Instagram operated in the same

industry (social media) and shared similar
production stages in their photo-sharing services.

• Facebook sought to strengthen its position in the

social sharing space and saw the acquisition of
Instagram as an opportunity to grow its market
share, reduce competition, and gain access to new
audiences.

• Facebook realized all of these through its

acquisition. Instagram is now owned by Facebook
but still operates independently as its own social
media platform.
VERTICAL
INTEGRATION
- Occurs when a firm performs more than one activity
in the sequence of the marketing process.
- It perform value chain activities along more than
one stage of an industry’s overall value chain.
- A vertically integrated business refers to a business
that has expanded into different steps along
production, manufacturing, and supply.
- In other words, a vertically integrated business
controls some aspect of the supply chain, which
means that A vertically integrated business can
function in two ways: forward integration, and it not
only distributes the product it sells, it is also
involved in the creation and development of that
product before it reaches the consumer.
The Apple Model
• Apple was the first company to reach a trillion-dollar
evaluation, showcasing its dominance in the
electronics industry.
• one of the most significant vertical integration
examples because the company has controlled the
manufacturing and distribution of its products from
the time it was founded. Apple not only sells
computers, iPhones and iPads, but it also designs the
software that powers these products.
• Rather than outsourcing its software development,
Apple relies on its own designers to invent software
that is perfectly compatible with the company’s
brand. The challenge with the Apple model, however,
is that hardware manufacturing and software
development require a different set of skills. Hiring
employees that aren’t highly skilled and inventive can
create problems, something that isn’t an issue with
Apple.
HISTORY OF MARKET
INTEGRATIONS
Before the rise of today’s modern economy, people only produced for their
family. Nowadays, economy demands the different sectors to work together
in order to produce, distribute, and exchange products and services. What
causes this shift in the way people produce for their needs? In order to
understand this, we will be going back in time, 12,000 years ago.
 HISTORY OF MARKET
INTEGRATIONS
AGRICULTURAL INDUSTRIAL CAPITALISM INFORMATION
REVOLUTION REVOLUTION AND SOCIALISM REVOLUTION
AGRICULTURAL REVOLUTION

The first big economic change was the Agricultural Revolution (Pomeranz,
2000). When people learned how to domesticate plants and animals, they
realized that it was much more productive than hunter-gatherer societies.
This became the new agricultural economy farming helped societies build
surpluses, meaning, not everyone had to spend their time producing food.
This, in turn, led to major developments like permanent settlements, trade
networks, and population growth.
INDUSTRIAL REVOLUTION

The second major economic revolution is the Industrial revolution of the

1800s. With the rise of industry came new economic tools, like steam
engines, manufacturing, and mass production. Factories popped in and
changed how work functioned. Instead of working at home where people
worked for their family by things from start to finish, they began working as
wage laborers and then becoming more specialized in their skills. Overall,
productivity went up, standards of living rose, and people had access to a
wider variety of goods due to mass production.
 CAPITALISM AND
SOCIALISM
CAPITALISM is a system in which all natural resources
and means of production are privately owned. It
emphasizes profit maximization and competition as the
main driver of efficiency.
This means that when one owns a business, he needs
to outperform his competitors if he is going to succeed.
He is incentivized to be more efficient by improving the
quality of the product and reducing its cost.
 Critics to
CAPITALISM
Prominent among critiques of capitalism are
accusations that capitalism is inherently
exploitative, alienating, unstable,
unsustainable, and creates massive economic
inequality, commodifies people, and is anti-
democratic and leads to an erosion of human
rights while it incentivizes imperialist expansion
and war.

https://en.wikipedia.org/wiki/
Criticism_of_capitalism
 CAPITALISM AND SOCIALISM
SOCIALISM
- The means of production are under collective ownership. It
rejects capitalism’s private property and hands-off approaches.
In here, property is owned by the government and allocated to
all citizens, not only those with the money to afford it.
- It emphasizes collective goals, expecting everyone to work for
a common good and placing a higher value on meeting
everyone’s basic needs than on individual profit.
CAPITALISM AND SOCIALISM
 INFORMATION REVOLUTIONS

Ours is the time of the information revolution. Technology reduced the role of
human labor and shifted it from a manufacturing-based economy to one that
is based on service work and the production of ideas rather than goods. This
had residual effects on the economy.
Computers and other technologies are starting to replace everything, through
continuing advancements in that technology seem to ensure that this
revolution would touch the lives of People.
https://www.youtube.com/watch?v=opdc8hQN0ew
KEY CONCEPT
• MARKET INTEGRATION

• INTERNATIONAL FINANCIAL INSTITUTIONS

• Bretton woods system
• GATT | General Agreement On Tariffs And Trade
• WTO | World Trade Organization
• IMF | International Monetary Fund and the World Bank

• HISTORY OF GLOBAL MARKET INTEGRATION

• Agricultural Revolution & the Industrial Revolution
• Capitalism and Socialism
• Information Revolution

• GLOBAL CORPORATIONS
• Transnational Corporation/Multinational Corporations

• SUTAINABLE DEVELOPMENT
 ROLE OF INTERNATIONAL FINANCIAL
INSTITUTIONS TO THE GLOBAL ECONOMY

• Chartered by more than one country.

• Owners or share holders are generally national governments.
• Manage Global Financial System
• Most prominent IFIs are creations of multiple nations,
although some bilateral financial institution exists and
technical IFI.
• Best known IFI were established after WORLD WAR II to assist
in the reconstruction of Europe and provide mechanisms for
international corporation in managing the global financial
system.
 International Bank for Reconstruction
and Development IBRD or World Bank.
Responsible for funding postwar reconstruction projects. It
was a critical institution at a time when many of the world’s
cities had been destroyed by the war.

INTERNATIONAL MONETARY
FUND (IMF)
Global lender of last resort to prevent individual countries from
spiraling into crisis. If economic growth in a country slowed
down because there was not enough money to stimulate the
economy, the IMF would step in.
• INTERNATIONAL MONETARY FUND
(IMF)

• MULTI-CULTURAL DEVELOPMENT
1. World Bank Group (WBG)
2. African Development Bank
3. ASIAN Development Bank
4. Inter-American Development Bank
5. European Bank for Reconstruction
Development
 FOSTER GLOBAL MONETARY COOPERATIONS
 SECURE FINANCIAL STABILITY
 FACILITATE INTERNATIONAL TRADE
 PROMOTE HIGH EMPLOYMENT
 SUSTAIN ECONOMIC GROWTH
 HELP REDUCE POVERTY AROUND THE WORLD
 MULTI-CULTURAL DEVELOPMENT (MOB)

World Bank African Asian Development

Group Development Bank Bank
Poverty Reduction
Make leverage loans to the Help developing countries
developing country. Economic & Social Development
in the least developing African Reduce Poverty
Observer of the UN development
Bank. Country.
Improve the life of its people.
Partners:
1. Government
2. Private Sectors
3. NGO
4. Development Agencies
5. Community Base Organizations
 MULTI-CULTURAL DEVELOPMENT (MOB)
Inter-American Development Bank
Largest source of Development
Financing for Latin America & Canadian
Countries
EUROPEAN BANK for
Reconstruction
Members comprises 60 Countries
Operates in Central & Eastern Countries in Europe.
Purpose:
 Foster Economic & Democratic transition process
 Promotes Private & Entrepreneurial Initiative through
provisions of loans, equity investment and Technical
cooperation's.
 MEMBERSHIP
COMPOSITION OF IFI’s

1. Only Sovereign countries are admitted as member-owner.

2. Broad country membership to include borrowing developing
countries and developed donor countries.
3. Membership in regional development banks include
countries around the world as members (not limited
countries from the region)
4. Has its own independent legal and operational states.
MAIN OBJECTIVES
1. Provides temporarily financial assistance to member
countries to help ease balance of payments adjustments.
2. MDBs provide financing for development to developing
countries through:
 Long term loans (with maturities of up to 20 years) at interest rates
way below market rates. Funding comes from international capital
markets and relend to borrowing government in developing countries.

 Very long-term loans (sometimes called credits with maturities at 30-

40 years) at interest rates below market rates. Funding for loans come
from direct contributions by government in the donor countries.

 Grant financing by some MDBs for technical assistance advisory

service or project preparation.
 GLOBAL
CORPORATION
GLOBAL CORPORATION
• A global corporation, also known as a global company, is coined
from the base term ‘global’, which means all around the world. It
makes sense to assume that a global company is a company that
does business all over the world.

• This generally referred to as a multinational corporation (MNC).

An MNC is a company that operates in two or more countries,
leveraging the global environment to approach varying markets in
attaining revenue generation.

• These international operations are pursued as a result of the

strategic potential provided by technological developments,
making new markets a more convenient and profitable pursuit
both in sourcing production and pursuing growth. global company
is any company that operates in at least a country other than the
country where it originated. https://smallbusiness.chron.com/global-
corporation-63267.html
 TO BE A GLOBAL COMPANY, YOU NEED TO INTRODUCE NOT ONLY YOUR
PRODUCTS, BUT ALSO YOUR COMPANY TO PEOPLE WHO LIVE IN
ANOTHER COUNTRY. YOU NEED TO CONDUCT SIGNIFICANT RESEARCH TO
FIGURE OUT WHICH COUNTRY IS YOUR BEST CHOICE FOR EXPANSION AND
HOW TO INTRODUCE YOURSELF.
Significance of Global Corporations:
You can increase your customer base
When you expand your business into another country, your
customer base expands along with it. The market in the
United States could be full of products just like yours. You
may find, however, that this is not the case in another
country. That could present an expansion opportunity for
your company. What's familiar to your consumers in the U.S.
could be fresh to consumers in another country.
You can reduce your operating costs
If the manufacturing or labor costs are lower in another
country, expanding to that country enables you to save on
your operating costs. This can improve your bottom line. In
fact, reducing operating costs are a key reason why many
global companies expand.
You don’t need to be bogged down by seasonality
If you sell a seasonal product that experiences fluctuating
sales at different times of the year, then you can expand to
countries that have seasons opposite to those in your base
country, enabling you to have high sales figures all year.
You can boost the growth rate of your company
If your company has been growing rapidly in your locale,
chances are that this growth may eventually stall,
because of market saturation. In that instance, you can
expand to another country so you can maintain rapid
growth.
You can create new jobs
Expanding into another country involves a lot, such as
hiring representatives and employees of your company
in the new country, as well as setting up offices and
various facilities, and so on. You’re likely to employ locals
and, in the process, you will create new job
opportunities in the country where you are expanding.
This helps boost the local economy and it also gives your
company a good reputation.
The Contemporary World
MARKET INTEGRATION
Instr. Morell B. Caña, RPm
THANK YOU AND
GOD BLESS
**Good Luck on your Prelim
Exam**