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Market

The document discusses different types of market integration including horizontal, vertical, and conglomeration integration. Horizontal integration involves mergers and acquisitions between companies producing similar goods and services. Vertical integration is when a company expands into different stages of production or distribution like backward or forward integration. Conglomeration is a merger between unrelated companies.

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17 views

Market

The document discusses different types of market integration including horizontal, vertical, and conglomeration integration. Horizontal integration involves mergers and acquisitions between companies producing similar goods and services. Vertical integration is when a company expands into different stages of production or distribution like backward or forward integration. Conglomeration is a merger between unrelated companies.

Uploaded by

mjlaway28
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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market

integration
MARKET
a place where parties can gather
to facilitate the exchange of
goods and services.

Integration
- the action or process of
successfully joining, combining or
mixing two or more things in an
effective way
MARKET Integration
- A situation in which separate
markets for the same product
become one single market

-According to Kohl’s and Uhl, Market


Integration is a
process that refers to a corporate
expansion by
consolidating additional marketing
functions and activities
within a single management
framework.
TYPES OF market INTEGRATION
1. HORIZONTAL
a. Merger
b. Acquisition
2. VERTICAL
a. Backward vertical integration
b. Forward vertical integration
3.CONGLOMERATION
a. pure
b. mixed
TYPES OF market INTEGRATION
1.HORIZONTAL
– acquisition of a business producing the same or similar
goods and services
- A strategic move where companies expand their
presence
by acquiring or merging with rivals.
EXAMPLES: PLDT AND GLOBE, both as
Telecommunication Company had a joint acquisition of
the telecom assets of San Miguel Corp (SMC)
TYPES OF market INTEGRATION
1.HORIZONTAL: Merger
-join two firms of the same size. A merger is a
combination of two companies to form a new
company, and both original companies cease to exist
independently.
In a merger, two companies of roughly equal
size come together to create a new, combined
entity. The new entity may have a new name,
management structure, and business operations.
TYPES OF market INTEGRATION
1.HORIZONTAL: Acquisition
an acquisition occurs when one company outright
takes over the operations of another company.
Though the two companies technically join together,
one company remains in control. Acquisitions involve
buying smaller companies. In an acquisition, one
company is typically the dominant party, and it may
absorb the assets, liabilities, and operations of the
other company.
ADVANTAGES OF HORIZONTAL INTEGRATION
1.ECONOMIES OF SCALE
By combining resources and operations, companies
can achieve cost savings through economies of scale.
This can result in lower production costs and
increased efficiency

2. INCREASED MARKET SHARE


Acquiring competitors allows a company to
expand its market share, making it a more dominant
player in the industry.
ADVANTAGES OF HORIZONTAL INTEGRATION
3.REDUCED COMPETITION
Horizontal integration reduces the number of
competitors in the market, potentially leading to
higher prices and better profit margins.

4. ACCESS TO NEW MARKETS


It provides an opportunity to enter new
geographical markets or customer segments.
DISADVANTAGES OF HORIZONTAL INTEGRATION
1.Oligopoly
s a market structure in which a small number of
large firms dominate the industry. These firms have
significant market power, and their actions can influence
the market conditions, prices, and competition.

2.Monopoly
a market structure in which a single seller or
producer dominates the entire market and is the exclusive
provider of a particular good or service. In a monopoly,
there are no close substitutes for the product or service
offered, and the monopolist has significant pricing power
VERTICAL INTEGRATION
- A strategy where a company integrates into
new parts of the value chain to increase
profit.
-This approach can be beneficial when suppliers
or buyers have gained too much power, allowing
them to earn more at the expense of the
company
VERTICAL INTEGRATION
- Vertical integration is a business strategy in
which a company expands its operations within
the same industry, but at different stages of
the production or distribution process.
There are two main types of vertical
integration:
backward integration and forward integration.
BACKWARD
VERTICAL INTEGRATION
-integration involves a company moving back or
upstream along with the value chain and entering the
business of a supplier. In other words, the company
moves backward towards the sources of raw materials
or inputs for its products.
-It is used by companies to prevent suppliers from
having too much power over their firms.
FORWARD
VERTICAL INTEGRATION
involves a company moving further down the
value chain to enter the business of a
purchaser.
Forward vertical integration occurs when a
company extends its operations into activities
that are closer to the end-consumer or
customer in the supply chain. In other words,
the company moves forward towards the
distribution and sales channels.
CONGLOMERATION
a fusion of companies involved in completely unrelated
business activities.
There are two kinds of mergers of conglomerates: pure
and mixed. Pure mergers of conglomerates involve
companies with nothing in common, while diverse
mergers of conglomerates involve companies looking
for product extensions or market extensions.
thank you

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