Scribd
Upload
42 views3 pages

Lesson 3.2 Market Integration Video 1: History of Global Market Integration

on how the world was made during the trade bloc and how does it enables the trade using the market integration

Uploaded by

Allyza Jordan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
42 views3 pages

Lesson 3.2 Market Integration Video 1: History of Global Market Integration

on how the world was made during the trade bloc and how does it enables the trade using the market integration

Uploaded by

Allyza Jordan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Lesson 3.

2 
Market integration 
 
Video 1: History of Global Market Integration 
https://www.youtube.com/watch?v=jTjS4CyNbp4 
 
Questions: History of Global Market Integration 
What is Market Integration? 
- A situation in which separate markets for the same product becomes one
single market
- Occurs when prices among different locations or related goods follow
similar patterns over a long period of time
What did the rise of industry bring? 
- There came the new/ economic tools like steam engines and manufacturing
What changes did industrialisation make for people? 
- People began working as wage laborers and becoming more specialized
with their skills.; the mass production went up and saw the economy.
What changes has the Information Revolution brought for people? 
- Computers and other technologies are beginning to replace many jobs
because of automation/outsourcing jobs
 
Reading 1: History of Market Integration 
 
https://www.encyclopedia.com/history/news-wires-white-papers-and-books/market-integration 
 
(Sections: Rise of Free Trade, Integration of Grain Markets at the Turn of the Century) 
 
Questions: History of Market Integration 
 
Reducing which two costs helped give rise to international trade? 
- Physical changes in lowering freight (transportation cost) and transaction
costs were not the only forces stimulating market integration
What does the term ‘free trade’ mean? 
- Free trade mean forcing government to abandon tariffs on all imported
goods apart from a few luxury items
Why does free trade mean it is no longer to always have a trade surplus with any
country? 
- It is not needed to be balance or to be in surplus in the trade relations with
a foreign country; rather, a deficit in trade with one country could be offset
by a surplus in trade with another country, liberalizing world trade in a way
never previously seen. --
When grain markets were integrated in Asia, was the Philippines an importer of
an exporter of rice? 
- When grain markets were integrated in Asia, the Philippines was importer
of rice.
What benefits did the exporting countries receive from their surplus production? 
- The benefits that exporting countries receive from their surplus production
was that prices moved in the same way which means that the cost of
production and cost of transport from the place of origin is less than the
prevailing price for that commodity in the destination.
 
Two types of Market Integration 
1. National Integration 
 
 
Reading 2: Global Economic Integration in the Philippines 
 
https://www.studocu.com/en/document/polytechnic-university-of-the-philippines/the-contemporary-
world/lecture-notes/market-integration/3181223/view 
(Sections: Definition of Market Integration, Free Trade, World’s Free Trade Areas – read only AFTA and
TPP - Protectionism) 
 
Questions: Global Economic Integration in the Philippines 
 
What does “market integration” mean? 
- According to the Cambridge Business English Dictionary, Market Integration
is a situation in which separate markets for the same product become one
single market (e.g. when an import tax in one of the market is removed)

To which free trade area does the Philippines belong? 


- The free trade area in which Philippines belong is the AFTA (Association of
Southeast Asian Nations Free Trade Area)

To which Asian free trade area does the Philippines not belong?


- The Asian free trade that Philippines does not belong is the TPP (Trans-
Pacific Partnership) renamed as CPTPP (Comprehensive and Progressive
Agreement for Trans-Pacific Partnership)
2. Business Integration 
Get Definitions of each of these types of Market Integration 
For each type of Integration, think of an example – the example can either be one you know for real, or
one you can imagine; eg for Backward Integration – a Private Hospital buying and taking over a private
medical equipment supplier. 
NB – watch the short videos, they give simpler definitions 
Forward Integration 
https://www.investopedia.com/terms/f/forwardintegration.asp 
Definition = 
Forward Integration is a business strategy that involves a form of downstream vertical integration
whereby the company owns and controls business activities that are ahead in the value chain of its
industry (e.g. An example of Forward Integration that I know for real is the handcrafted specialty drink
specifically bottled coffee known as “It’s A Grind Ph” that instead of distributing it to various
supermarkets, the seller installed a coffee stalls somewhere along Las Piñas)

 
Horizontal Integration 
https://www.investopedia.com/terms/h/horizontalintegration.asp 
Definition = 
Horizontal integration is the acquisition of a business operating at the same level of the value chain in
the same industry. It is a competitive strategy that can create economies of scale, increase market
power over distributors and suppliers, increase product differentiation and help business expand their
market or enter new markets. By merging two businesses, they may be able to produce more revenue
than they would have been able to do independently. (e.g. An example of Horizontal Integration
 
Backward Integration 
https://www.investopedia.com/terms/b/backwardintegration.asp 
Definition = 
Backward integration is when a company buys another company that supplies the products or services
needed for production. A form of vertical integration in which a company expands its role to fulfill tasks
formerly completed by businesses up the supply chain.

You might also like