CHAPTER 3: MARKET INTEGRATION (CONTEMPOPARY WORLD)
A process which refers to EXPANSION of FIRMS by CONSOLIDATING ADDITONAL MARKETING functions and acitivities under a SINGLE MANAGEMENT
Market integration
This approach cen be DESIRABLE when FIRM'S SUPPLIER or buyers have gained TOO MUCH POWER over the firm and are using their power to CAPTURE MORE PROFITS at the firm's expense
Vertical integration
It involves a firm moving BACK, or UPSTREAM, along with the value chain and entering the business of a supplier
Backward vertical integration
Downward vertical integration
If executives are concerned that a SUPPLIER has TOO MUCH POWER over the FIRMS. What strategy to be use?
Backward vertical integration
A behavior of company or market that BUYS their SUPPLIER. They BENEFIT to EACH OTHER.
Backward vertical integration
is a COMPETETIVE STRATEGY that can create economies of scale, INCREASE market power over distributors and suppliers, increase product differentiation, and help businesses EXPAND their market or ENTER NEW MARKETS
Horizontal integration
A SMALL NUMBER of companies within the SAME INDUSTRY, it creates an _______
Oligopoly
Jollibee's acquisition of Greenwich Pizza Corporation. Both Jollibee and Greenwich are fast food chains that offer similar products such as pizzas and pastas. By acquiring Greenwich, Jollibee expanded its presence in the pizza market and strengthened its position in the fast food industry in the Philippines. This move allowed Jollibee to diversify its product offerings and capture a larger share of the market.
Horizontal integration
The REASON why FIRMS would want an to INCREASE in MARKET SHARE, synergu, and cross-selling
Merge
This happens when TWO COMPANIES that offer varying SERVICES or are involved in different sectors of business MEGRE TOGETHER
Conglomerate mergers
It shows the RELATIONSHIP of the FIRM in a market. The EXTENT of integration influences the conduct of the firms and consequently their marketing efficiency
Integration
This can be sometimes be a DOWNFALL for certain companies because they can SPREAD THEMSELVES across TOO MANY AREAS
Diversification
Among the MOST VERTICALLY INTEGRATED FIRMS TODAY
Oil companies
This can be USEFUL for NEUTRALIZING the EFFECT of POWERFUL BUYERS
Forward vertical integration
occurs when a COMPANY acquires or MERGES with a SUPPLIER
example: A shoe manufacturing company buys a leather tannery to ensure a stable supply of leather for making shoes.
Backward vertical integration
ay ang proseso kung saan ang isang kumpanya ay bumibili o bumubuo ng negosyo na nagsusuplay sa kanila ng mga raw materials o inputs para sa kanilang produksyon. Halimbawa nito ay kung isang kumpanya ng paggawa ng kape ay bumili ng lupang taniman ng kape para hindi na kailangan bumili ng kape sa ibang supplier. Sa pamamagitan nito, nakokontrol ng kumpanya ang buong supply chain mula sa paggawa hanggang sa supply ng raw materials.
Backward vertical integration
growth and expansion of the EXISTING BUSINESS and GREATER MARKET SHARE at the same time level of the chain
Horizontal integration
It involves a company moving further DOWN the value chain to ENTER the business of a purchaser.
Forward vertical integration
a coffee bean producer might open its own chain of coffee shops to sell its beans directly to consumers.
Forward vertical intgeration
For instance, a car manufacturer might acquire a steel mill to produce the steel needed for its vehicles.
Backward vertical integration
Is a FUSION of companies involves in COMPLETELY UNRELATED business activities
Conglomerate integration
A partnership or AFFLISTIIB you don't need to buy it
Example: Jollibee affiliated Del monte for their sauce in frenc fries
Lateral integration
An example could be the merger of two major telecom companies like Globe Telecom and PLDT in the Philippines, resulting in a more dominant presence in the telecommunications industry. Philippine-based telecommunications companies merge to form a single, larger entity. By combining their operations, resources, and customer bases, they can achieve economies of scale, reduce competition, and expand their market share.
Horizontal integration