SAS 1

Globalization is growth on a worldwide scale. It is the process of integration and the international
influence of economies and cultures. It is an exchange of goods and an exchange of ideas and even anti-terrorist
protections.

What are the factors of globalization? What are the roles/contributions of these factors to
globalization? Some elements in globalization include economics, technology, and the blending of
cultures. These were the subjects of globalization all across nations.

Some factors of globalization are the following:

1. Globalization in Economics

Interdependence among international economies is a great starting point when seeking an understanding of
globalization. The more technology advances and the more transportation improves, the more global outlets
are revealed in different areas, such as reducing barriers to international trades and reducing restrictions to
movements of capital and investments. A greater number of goods can be exchanged, and production
methods can be improved. Here are some examples:

Multinational corporations operate on a global scale, with satellite offices and branches in numerous locations.
This means multinational companies can stay open virtually 24 hours a day and service customers no matter
where they're located.

Outsourcing can add to the economic development of a struggling country, bringing much-needed jobs if a
powerful organization can outsource its call center to a developing country, which creates a new class of jobs
for people who may not have had that opportunity otherwise.

2. Globalization in the Blending of Cultures

New cultures are being transmitted when more people are traveling or exchanging goods. It is also affected
by open communication by internet, especially intermarriages coming from dating site meet-ups.

While world economies benefit from globalization, the spread of new cultures is also affected. Christian
missionaries from Europe added to the globalization of Christianity. As they migrated from one country to
another, more and more people converted to a new spiritual way of living.

Improved travel facilitated the growth of globalization, as people moved for a better job or a better life.
Migrants also fled from danger or oppression. People can pack up all their belongings and have them shipped
anywhere in the world. Planes are faster, frequent, and, often, more affordable.

Food is another factor of globalization. Filipino or Korean food, for example, is certainly not only limited to the
Philippines or Korea. Instead, we can dine on Filipino and Korean delights in America, all across Europe, and
beyond.

3. Globalization in Technology

It's easy to argue that technology is a vehicle to globalization. Especially the use of internet, faster mode of
travel by air, land, and water, latest models of communication tools and medical equipment, and life-saving
drugs. The ability to access mountains of information online has opened countless doors. Here are some
examples of globalization, brought to us by the gift of technology:

Global news networks, like CNN, contribute to the spread of knowledge. Worldwide news is reported almost
 instantly, if not via live broadcast, through continual updates to online news outlets.
Cell phones connect people all over the world like never before. There are many platforms through which
people can communicate too, including Facebook, Messenger, WhatsApp, Instagram, Snapchat, Twitter,
Hangout, etc.

Based on the factors that contributed to globalization, which was the major contributor to globalization?

Internet is a significant contributor to globalization, not only technologically but also in other areas,
like the cultural exchanges of art. Consider how we can enroll in online educational programs from
anywhere globally and access new information on virtually any topic.

What is the essential positive aspect of globalization?

Answer: Based on my readings, one of the essential aspects of globalization is developing information
services or modern communications. With the use of technology and modern communications, the global
circulation of information is carried out in real-time via Internet tele-information systems. So businesses can
easily transmit their transactions to their counterparts in other countries. They can easily do business with
them.

What is the negative aspect of globalization?

Answer: One article I have read says, “One of the negative aspects of globalization is the emergence of
global financial crises. It happened in 2008, wherein there was bankruptcy in one of the largest investment
banks in the world. Small banks merged with big banks so that they can maintain their supremacy in the
banking world.” With the merging or acquisition of these small banks it affected also some productions or
other factors from country to country looking for a cheaper workforce, and others set up sales outlets in
other countries. (Ex. Proctor and Gamble, the manufacturer of Colgate, soaps, shampoo, etc.) They
transferred their production of goods from the Philippines to other Asian countries for a cheaper labor cost.
Our economy is almost dependent on foreign aid, high import, low export, etc.

SAS 2
What is Internationalization?

Globalization is an economic process that aims to integrate countries' economies

globally; internalization acts the same as Globalization, improvising the local economy,
leading to its growthand expansion of businesses across other countries.

Internationalization is related to a firm's movement overseas, artists performing

overseas,Filipinos working overseas. At the same time, Globalization is the rapidly growing
integration of communication, finance, culture, and political ideology. Although,
Internationalization is the process that results in Globalization as firm movements could be the
cause of Globalization.

There is a substantial difference between Globalization and Internationalization.

Internationalization is to perform at the international standards with our domestic labor,
natural resources to compete for the global market. It is an effort with own nation's national
labor, capital, and resources by operating in domestic and an international market. Still,
Globalization is to integrate the economies with integrity and unity globally to use other
nations' labor, capital, and resources to reach the best results.
 Examples:
Filipinos are trained to be globally competitive professionals. They can work worldwide
and bring their culture and skills with them, like Nurses, Engineers, Doctors, Teachers,
Architects, Pilots, Domestic Helpers/Nannies, Cruise ship Crew, Law Enforcement, etc. They are
part of the International labor market.
After hitting 1000 stores locally, Jollibee started to go international by putting up store
branches in key cities of the world where Filipinos live. Another one is McDonald's, which
started as a fast-food chain inside the U.S. military bases in the Philippines catering to the
Americans who live and work inside Clark Airbase in Angeles City, Pampanga, and Subic Naval
Base Olongapo City, Zambales. After the bases closed down in 1991 and transferred to the
Philippine government, the store chain inside the bases started to put up branches all over the
Philippines and was patronized by Filipinos.
What are the differences between Globalization and Internationalization?

There are some differences between the two, which are very important to distinguish the roleof the two in
supporting nations toward Globalization.

Key Differences between Globalization and Internationalization

1. Globalization is the result, while Internationalization is one of the tools/processes to

achievethem.

1. Globalization is more with the nations and their economies. At the same time,
Internationalization is more related to the local individual, firm, and corporations
for doing up their businesses.

2. Globalization is a process, and Internationalization is part of the same.

3. Significant factors that affect Globalization are infrastructural and logistics setup,
telecommunications, etc. In contrast, Internationalization gets affected by cultural
tastes and preferences, local traditions, etc.

4. The prominent example of Globalization is the Elimination of Visa Obligations,

removing tariff and non-tariff trade barriers, liberalizing investment-related
obligations, etc. In contrast, inter-nationalization is sourcing, producing, or
selling materials or delivering services from one or more countries, setting up
branches and subsidiaries in other countries, etc.

5. Globalization is an economic process as it aims to integrate the economies.

Internationalization is an improvisation process as it will expand the business
across thenations.

7. Organizations like International Monetary Fund (IMF), World Bank, World Trade
Organization (WTO), etc., observe and work to implement Globalization. At the same
time, institutions like the European Union (EU), Asia Pacific Economic Cooperation
(APEC), North Atlantic Free Trade Agreement NAFTA, etc., boosts Internationalization.
What is Liberalization?

Let's say I have the freedom to do what I wanted to do. Can I call that Liberalization, or am I
being liberated? Yes, because there are no more restrictions to what you want to do in your life.
How does a liberated person speak and behaved? What is allowed or not allowed? There is no
restriction; they can talk things out without any limits, no one dictates what to say and do. There
is no regulation and policy imposed and rules that need to be strictly followed. There is relaxation
in some policies and regulations.

Liberalization generally refers to removing restrictions; usually, government rules and

regulations are imposed on social, economic, or political matters. It is a process whereby a

state lifts restrictionson some private individual activities. Liberalization occurs when
something which used to be bannedis no longer prohibited or when government

regulations are relaxed. Liberalization generally relates to activity within a certain country
as a result of modernization and development. Some countries offer visitor visas upon
entry into the country; many countries are visa-free. Liberalization is a process of removing
government-imposed restrictions on the movements between nations to createan "open
and borderless" world economy.

What are Globalization and Liberalization?

Globalization and Liberalization are concepts closely related to one another. Both
Globalization and Liberalization refer to relaxing social and economic policies that result in
better integration with aneconomy and between nations.
Globalization is the greater integration among countries and economies for trade,
economic, social, and political benefits. This increased interdependence, in the end, will also
eliminate war-related situations, which ultimately leads to harmony among the nation. Free trade,
specialization, and global integration mean that countries are free to trade.

Globalization and Liberalization

Globalization and Liberalization are concepts closely related to one another. Both
Globalization and Liberalization refer to relaxing social and economic policies that result in
better integration with aneconomy and between nations.
Globalization is the greater integration among countries and economies for trade,
economic, social, and political benefits.
 Barriers to a Free Philippine Press
The government affirms that
press freedom in the country is
guaranteed. According to Presidential
spokesperson Harry Roque, “The
(Philippine) media remains alert and
vibrant in their reportage of the
government and the actions of officials.”
This is contrary to Reporters Without
Borders’ (RSF) 2021. World Press
Freedom Index which ranked the
Philippines 138th out of 180 countries,
indicating that the country’s press
freedom is in a “difficult situation.” In this
lesson we will find out why the Philippine
press ‘seems free butnot free’.
This is the six criteria used by RSF in the qualitative part of their methodology for the WPF
Index. RSF combines this qualitative analysis with quantitative data on abuses against journalists
during the period evaluated.
• Pluralism: the degree to which opinions are represented in the media

• Media Independence: the degree to which the media are able to function
independently of sources of political, governmental, business and religious power and
influence
• Environment and Self-censorship: the environment in which news and information
providersoperate
• Legislative Framework: impact of the legislative framework governing news and
informationactivities
• Transparency: transparency of the institutions and procedures that affect the
production ofnews and information
• Infrastructure: the quality of the infrastructure that supports the production of
news andinformation
*Abuses: level of abuses and violence against the press
In enhancing our education system, how can we connect it to Internationalization?
Answer: Education is also an essential factor in Globalization and internalization. Countries all over the
world are moving forward toward the enhancement of their educational system. They are making sure that
they can produce professionals adaptable to changes. So that they can compete globally and quickly enter
not only in national but also in the international market. In the Philippines, the Commission on Higher
Education is doing its best to innovate constantly. The curriculum managers are redesigning the curriculum
tailored to the needs and demands of the national and international market. Hiring qualified teachers is
also necessary to enable the schools to produce the best professionals. They can contribute to giving quality
education, not to mention the training provided to them and the modern facilities they will be used to cause
students to learn.
What are the disadvantages of social Liberalization?
Answer: The disadvantages of social Liberalization were brought by the relaxation of some laws about the
society. This brings a new platform in the community before Globalization. Globalization influences social
Liberalization and countries became adaptable to change and innovations, which affects the attitudes and
behavior of the people in the society. Take, for example, in the union of marriage; other countries practice
same sex marriage. Parents nowadays are now relaxing their restrictions on their child/children choices,
especially in an early relationship resulting in early marriages and or indulging themselves in pre-marital
sex. People can do things freely without any restrictions and inhibitions.

SAS 3
Globalization is the greater integration among countries and economies for trade, economic, social,
and political benefits.

Westernization, the adoption of the practices and culture of Western Europe by societies and
countries in other parts of the world, whether through compulsion or influence. Westernization
reached much of the world as part of the process of colonialism and continues to be a significant
cultural phenomenon asa result of globalization.

Westernization began with traders, colonizers, and missionaries from western Europe who believed
that their way of life was superior to those of the peoples in the countries to which they
traveled. The occupied peoples were required or encouraged to adopt western European
business practices, languages, alphabets, and attire. They were also encouraged to assume
western European education systems, literary and artistic standards, and to convert to
Christianity. Many countries had Western types of government and military practices imposed on
them.

EFFECTS OF WESTERNIZATION

Westernization has greatly affected our traditions, customs, family, and our love and respect for
others. The strong family ties between Filipino members are eroding. The respect for elders is
diminishing, hence the need for a home for the aged in the Philippines. Prostitution yields so
many babies fathered by western men given for adoption by many prostitutes working in the
Philippines' red-light districts.

ADVANTAGE OF WESTERN CULTURE

Western civilization has brought good things, too, most especially in the form of modern
medicine. Central cooling is excellent if you live in an unsuitable climate. You can eat the
abundance of food simultaneously in the starving world due to food cropping and food
preservation. You are traveling by air, land, and water in the fastest possible way because of
technology in building ports, airports, andexpressways.

GLOBALIZATION AS WESTERNIZATION

1. Westernization is a cultural transformation whereby other societies adopt western ideas. Usually,
it is associated with capitalism, freedom of thought and expression, and more and more with
American cultural entertainment and lifestyles. At the same time, Globalization, on the other hand,
refers to closer integration of people in both cultures and more practical concerns like transport and
products.
 Both terms are relatively vague and open to interpretation, so it is easy to see how people get
confused. Given the pervasiveness of the US's "Western" ideas globally, other countries that open
themselves upto that world are bound to get a mixture of Globalization and Westernization together.

For example, suppose you ask your friends here in the Philippines what they think of
Westernization. In that case, they'll point to the nearest McDonalds, KFC, or Kobe Bryant, or Nike
shoes or something like these.

On the other hand, Globalization refers to closer integration of people in both cultures and more
practical concerns like transport and products. Inevitably, there is some overlap with
Westernization. Still, it's easy to see that people will be confusing it with Filipinization or
Arabianization or Sinozation (Chinese) instead of in a few decades. Some are the examples:

1. Houses in Asia are supposed to be built tropical style with wide-open windows and open
ground floors to make way for floods to just pass. But houses now were patterned after Western
styles, so little windows make it so hot, and it was run over when the flood came.

2. Celebrations in the Philippines were dominated by Chinese and American cultures, from gowns,
food array and events places, firecrackers, etc.

3. Academic dreams: Filipinos take courses needed in Western countries, so after graduation,
they dream of working in the USA or any country in Europe, not here at home. We need farmers,
agriculturalengineers, and agricultural business people because the Philippines is an agrarian state.

How did Filipinos become so westernized?

The Philippines was colonized by Spain (European Kingdom) in 1565 and the United States of America
(western country) in 1898, so Filipinos adopted Spanish culture for 333 years. We learned Roman Catholic
religion from Spain and human rights violations that led to a revolution in 1896. Spain sold the Philippines,
Mexico, Cuba, and Puerto Rico to the United States in 1898 for 20 Million dollars. The United States gave the
Philippines every system we have today; Education and Culture, Hygiene, Sanitation and Health care,
Agriculture, Public Works and Engineering, Government and Politics, Entertainment, Building Codes, Military
Officers' schools, and Police system. The United States makes Filipinos their Little Brown Brothers that speak
English and accept everything the USA told us to do and say until we were granted Independence in 1946.
Filipinos mostly have the American dream. So we took up courses which will give us a chance to go to the USA.
We get our colonial mentality, thinking that anything imported from western countries is better than what we
have here locally. These two western countries gave us mixed cultures. They improved the genetic stock of
Filipinos, so we Filipinos were so good- looking and intelligent. We are also the third-largest English-speaking
nation outside America. Are you one of those?

Is it true that legalizing marijuana as medicine is a western solution to help chronically ill
persons?

Answer: Based on some research and other articles I read, some western countries are up to legalizing
marijuana, a medicinal plant to help treat symptoms of illness and other conditions. A report mentioned, “the
scientific study of the chemicals in marijuana, called cannabinoids, has led to two FDA-approved medications
that contain cannabinoid chemicals in pill form. Continued research may lead to more cures. It led to two FDA-
approved medications that contain cannabinoid chemicals in pill form. However, the U.S. Food and Drug
Administration (FDA) has not recognized or approved the marijuana plant as medicine.

Is same-sex marriage originated in Western countries?

Answer: Yes, Gay marriage was first legalized in the Netherlands in 2000, and the Netherlands is part of
Western Europe. Before legalizing same-sex marriage, Denmark was the first country to recognize same-sex
couples as domestic partners and is also part of Western Europe. Twenty-nine (29) countries out of 195
countries passed laws allowing gay marriage. UK legalized it in 2013 and the US in 2015. Other countries
followed the same practice of gay or same-sex marriage.

SAS 4
What do you know about Westernization? Of course, when you talk of Westernization, we
need to consider Globalization where this thing happens. Because of Globalization, western
countries were able to transmit their ideas, beliefs, and practices adopted by other countries, such as
politics, economy, technology, industry, and culture. International trade was freely conducted, and
other countries enjoy the benefits of the goods and services produced and business worldwide. The
cultural transformation happened, wherein Other societies adopt western ideas on things.

FORMS OF GLOBALIZATION

1. Economic Globalization
The concept of Globalization as a whole is mainly economic. Globalization has emerged and
developed largely as an economic concept and system. Economic Globalization is the financial
connection of a country with the global economic system. Globalization in the economic field is free
economic adoption. This removes the regulatory rules imposed on a country's economic affairs
and exposes the domesticeconomy to the world.

Features of Economic Globalization

Prominent economist Peter Drucker in his New Realities, discusses the economic features of
Globalization. They are:
 Due to Globalization, international organizations have spread globally to make the entire
world amere production and product-service market.
 The main objective of the global economy is to maximize the market.
 Investment in the globalization process has become a trade, not an investment in the trade.
 Due to Globalization, the power to make decisions is transferred from the national state to
theregional alliances.
 In the globalization economy, the management system dominates as a component of
production.
 The transaction of money mainly drives globalization. Again, the existence of an individual
response to these financial transactions is seen. Unproductive foreign capital creates adverse
effects on the global market.
 In economic Globalization, there is a process of almost spontaneous lending, finance, and
investment throughout the world. Information beyond the borders of the national state
organizes this process.
2. Political Globalization
Political ideology is often referred to as one of the characteristics of Globalization. That is, the
expression of Globalization also occurs in political ideology.

The transformation of liberalism is called an example of political ideology in the process of

Globalization. Moreover, the emergence, development, and expansion of Non- Governmental
Organizations (NGOs) as an expression of political Globalization; The role of the national states is
 to refer to the part of climate change and so on.

The expression of political Globalization has occurred in international organizations. All these
organizations exceed the national boundaries. Extending the edges of the single state of the
international organization extends to the global sphere of many states.

There are many and many international organizations in the present world. Most of these were
formed in the aftermath of World War II. Notable examples of this are the United Nations
Organization (UNO), the European Economic Community (EEC), the World Bank, the International
Monetary Fund (IMF), and the World Trade Organization (WTO), etc.

Theoretically, nation-states can take the initiative in organizing international organizations in a

coherent and organized manner without sacrificing their sovereignty. Transnational-state
boundaries may force international institutions to impose their will on states.

3. Financial Globalization

Financial Globalization can be linked with the rise of a global financial system with international
and monetary exchanges. Stock markets, for instance, are a great example of the financially
connected global world since when one stock market has a decline, it affects other markets
negatively as well as the economy as a whole.

What are the advantages of economic Globalization?

Answer: In the simplest way, economic Globalization is good because there is a mobilization of capital, goods,
services, and labor. Industrial countries that can produce more goods at a lower cost will sell them or distribute
them at a broader market abroad, especially in developing countries. Economies of other countries become
more interdependent because of the removal of barriers between borders so that trade will be facilitated to the flow
of goods, capital, services, and labor. Instead of producing goods, developing countries import or buy goods
from these countries because they will incur a higher cost of production if they produce these goods. There is
also a growth in international competition in the market.

What are the disadvantages of economic Globalization?

Answer: This is the opposite; while developing countries enjoy low costs in acquiring goods and services from
other countries, there is a decline in wages and loss of jobs for workers. Industries will slow down in their
production because of the high cost of producing the goods and services. If they can import these goods at a lower
price, this would give them more profit than paying high wages, taxes, and other business permits. Because of the
removal of barriers between borders, trade facilitated the flow of goods, capital, services, and labor. Sometimes,
these factors hinder developing countries from continuing to operate and produce goods and services.
SAS 5
What are the other forms of globalization? We have here three different states, which are: military,
cultural,and environmental.

Military globalization is defined as the process which embodies the growing extensity and
intensity of military relations among the political units of the world system. It reflects both the
expanding network of worldwide military ties and relations, as well as the impact of key military
technological innovations (from steamships to satellites), which over time, have reconstituted the
world into a single geostrategic space.

Military globalization implies firmer integration of armed forces around the world into the global
military system. It is characterized by extensive as well as intensive networks of military force. The
most obvious example of military globalization is the nuclear age and the proliferation of weapons
of mass destruction.

Cultural Globalization is the process of cultural globalization and is also sometimes called
McDonaldization. Cultural globalization is how a world-class of goods, ideas, and information is
produced in one part of the world. As a result, cultural differences between different races, regions,
and individuals are removed.

The emergence and development of international or multinational companies and the

emergence of global goods have partly driven globalization. The revolutionary growth and
expansion of information technology, the expansion of satellite-based communication systems,
the Internet, the telecommunication infrastructure, and various global media corporations are
highlighting the process of globalization.

However, as culture helps globalization, so does obstruction. As the elements or forces of

globalization are enriched by culture, so is resistance. Hollywood movies are screened worldwide,
Adidas sports goods are sold around the world. The Coca-Cola market is worldwide. McDonald's
has demanded the world's fast-food market; such products are many and varied worldwide. But all
these international brands have to do with the dignity of local culture and the touch of social
customs.

Environmental Globalization refers to internationally coordinated practices and

regulations in the form of international treaties regarding environmental protection. The
growth of globalization and its impact on the global environment is an essential concern to the
world.

According to some environmentalists, there is no doubt that the tide of development that has
come under the influence of globalization is polluting the environment. To them, globalization
increases our consumption of many products made through natural resources, affecting the
ecological cycle very severely.

Many think that industrialization is part of globalization, and industrialization has been
increasing with the help of globalization. Due to industrialization, harmful chemicals have been
thrown into the environment, affecting the environment dangerously. It can be easier to
understand with an example. 2nd December in 1984, in India, an accident occurred at the Union
Carbide pesticide plant in Bhopal (thecapital city of the Indian state of Madhya Pradesh).
This plant accidentally released almost 30 tons of highly toxic gas called methyl isocyanate and
other poisonous gases. The gases were spread throughout its surrounding town populated with
600 000 people. Those gasses affect them very severely; around 15000 people founded death. Until
now, those who directly or indirectly but alive have given birth to mentally or physically challenged
children.

Criminal globalization poses severe challenges to national and global security. It includes trans-
border crimes, such as drug trafficking, money laundering, prostitution, alien smuggling, arms
trafficking, andcounterfeiting.

Crimes of globalization, or transnational crimes, are crimes that are committed across national
borders. Since the fall of the Soviet Union and the collapse of communism in its neighboring
countries, trade has expanded globally. With it, the crime that so often accompanies large flows of
money.

Transnational criminals have been one of the biggest beneficiaries of globalization." Globalization
facilitates international trade and increases the difficulty of regulating global trade; traffickers and
smugglers have exploited this. This has allowed illicit actors to launder the proceeds of crime more
easily.

What do you think are the advantages and disadvantages of cultural globalization?
Answer: Each country has its own culture, which pertains to the way people do things and their values and
beliefs. Because of globalization, culture was also included as adopted by other countries who visited other
countries also. The transmission was effortless because culture can be shared and transmitted to other people,
even with new acquaintances. The disadvantage of this is the increase of people traveling/living in different
countries, thereby causing the imitation of these cultures from other countries. Example: Before globalization,
many countries would not allow females to acquire education, and even if they did, they were supposed to do
jobs such as teaching or nursing and other related jobs for women. Now countries worldwide have adopted
American culture even in the way they carry out business. Cultural clash/difference may happen in communities
from both developed and developing countries.

Is the Visiting Force Agreement (VFA) between the Filipino Army and the US Army partof
military globalization?
Answer: Answer: No! This is an agreement between the Philippines and the USA; it can't be said that it
became part of military globalization because the Philippines agreed with the US allowing them to train the
Philippine Armed Forces military tactics and strategies that can be used in a war against lawless elements or
local and international terrorism. Other countries were doing the same thing with their allied nations only, notin
all countries because there are sensitive issues tackled/addressed here, which should not be divulged to other
countries. The Philippines is one of the many allied countries of the USA.
SAS 6
Market integration

Market integration refers to how easily two or more markets can trade with each other. Foreign
trade helps the Integration of markets because it reduces barriers to trade and increases
fluidity betweenmarkets. *For example, Facebook buys out WhatsApp and Instagram.

Reasons for market integration:

● To remove transaction costs

● Foster competition
● Provide better signals for optimal generation and consumption decisions.
● Improve the security of supply

Market integration occurs when prices among different locations or related goods follow
similar patterns over a long period. Groups of goods often move proportionally to each other.
When this relation is apparent among different markets, it is said that the markets are
integrated. Thus, market integration is an indicator that explains how much different markets
are related to each other. A marketer plays the role of an integrator in the sense that he collects
feedback or vital inputs from other channel members and consumers and provides product
solutions to customers by coordinating multiple organization functions.

What is market integration, for example?

1. Establish wholesaling facilities by food retailers and set up another plant by a milk processor.
2. Facebook buyout of Instagram and WhatsApp to have a bigger market for image sharing.

Types of market integration

1. Horizontal Integration
2. Vertical Integration: Forward, Backward and Balanced Vertical Integration
3. Conglomeration

1. Horizontal Integration. This occurs when a firm or agency gains control of other firms or
agenciesperforming similar marketing functions at the same level in the marketing sequence
● In this type of Integration, some marketing agencies combine to form a union to reduce their
effectivenumber and actual competition in the market.
● It is advantageous for the members who join the group.

Effects of Horizontal Integration

● Buying out a competitor in a time-bound way to reduce competition.

● Gaining a larger share of the market and higher profits.
● Attaining economies of scale. ● Specializing in the trade.
Advantages of Horizontal Integration

1. Lower costs. (2)Higher efficiency. (3)Increased differentiation. (4)Increased market power.

(5)Reduced competition. (6)Access to new markets. (7)Economies of scale. (8)Economics of scope.
(9)International trade. Examples: Companies using horizontal Integration: Hp, Compaq, Facebook,
WhatsApp, Google Motorola

2. Vertical Integration. This occurs when a firm performs more than one activity in the sequence
of the marketing process. Example: San Miguel Purefoods says “from farm to platter goodies”; Apple

 It links two or more functions in the marketing process within a single firm or under
single ownership.

 This type of Integration makes it possible to exercise control over the product's
quality andquantity from the beginning of the production process until the product is
ready for the consumer.

 It reduces the number of mediators in the marketing channel. Example Meat industry
buys allthe functioning plants needed for running this meat industry.

3. Forward Integration. Suppose a firm assumes another function of marketing that is closer
to theconsumption function. In that case, it is a case of forwarding Integration. Example:
wholesale considering the role of retailing

4. Backward Integration. This involves ownership or a combination of sources of supply—for

example:when a processing firm assumes the function of assembling/purchasing the product from
the villages.

5. Balanced vertical Integration The third type of vertical Integration combines the backward
and theforward vertical Integration.

Advantages of Vertical Integration

1. It allows you to invest in highly specialized assets.

2. It gives you more control over your business.
3. It allows for positive differentiation.
4. It requires lower costs of the transaction.
5. It offers more cost control.
6. It ensures a high level of certainty when it comes to quality.
7. It provides more competitive advantages.

Effects of Vertical Integration

 More profits by taking up additional functions

 Risk reduction through improved market co-ordination
 Improvement in bargaining power and the prospects of influencing prices
 Lowering costs through achieving operational efficiency

6. Conglomeration A combination of agencies or activities not directly related to each other

may betermed a conglomeration when it operates under unified management.
 Examples:

SM Group of Companies, Lucio Tan Group of Companies, Gokongwei Group of Companies,

PHINMAGroup of Companies, Manuel Villar Group of Companies

Effects of Conglomeration

 Risk reduction through diversification

 Acquisition of financial leverage
 Empire–building urge.

What are the effects of market integration?

Both producers and consumers gained, but welfare gains were inversely related to the size of the
country and positively to the level of openness to trade. We infer that welfare gains from
international market integration were equivalent to substantial shares of economic growth in the 'long
19th century.

What are the effects of vertical Integration on the market?

Answer: There are benefits for companies to integrate vertically, including being more in control of their supply
chain, offering their goods at lower prices, and having increased market control. One factor is creating an
economy of scale. There is a reduction in the cost of production brought about, especially if the size of production
facilities increased. The larger the company gets, the more cost-effective it is to produce its goods and services.

What are the benefits consumers will get from vertical Integration?
Answer: Having a larger market share or marker power is the benefit of vertical Integration. When the two
companies merged, they also combined the product-based technology and services available in the market. With
more products under one name, the new company can increase its position among consumers. Big
firms/companies pursue vertical Integration for the obvious reasons, the advantages it offers like having greater
control over the supply chain and offering lower prices with high-quality products to consumers while increasing
market control.