Lesson 3 Market Integration

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Lesson 3: The Structures

of Globalization
Market Integration 1.
International Financial
Institution
2.
Global Corporation
3.
Multinational
Corporation
Market integration
It refers to the
process by which
different regional or
national markets
become interconnected
and function as a
single, unified market.
THREE
SECTORS of
ECONOMIC
SYSTEM
International Financial
Institutions (IFIs)
are organizations established to
promote global economic stability,
development, and cooperation among
countries. These institutions play a
crucial role in facilitating financial
assistance, providing technical expertise,
and fostering economic growth in
member countries.
1.
Primary Sector
2.
Secondary Sector
3.
Tertiary Sector
most
prominent
International
Financial
Institutions
(IFIs):
Primary Sector
The primary sector, also
known as the primary
industry, encompasses
economic activities that
involve the extraction and
collection of natural
resources directly from the
environment.
Primary Sector
• Agriculture
• Mining and Extraction
• Fishing
• Forestry
Primary Sector
The primary sector is
the most basic sector
because in its simplest
form, it does not
require a lot of
advanced machinery.
SECONDARY Sector
Secondary Sector
gains the raw
materials and
transforms them into
manufactured goods.
SECONDARY Sector
•Many of the industries
associated with the
secondary sector require
heavy machinery, consume
large quantities of energy
and produce a lot of
waste during the production
or construction process.
Key components
of the secondary
sector include
• Manufacturing
• Utilities
Tertiary Sector
•The tertiary sector involves services rather
than goods. It offers services by doing things
rather than making things.
International Monetary Fund
It provide resources to
countries in need of financial
assistance, and offer economic
policy advice and technical
assistance.
World Bank
The World Bank provides loans
and grants to middle-income and
creditworthy low-income countries
for development projects such as
infrastructure, education,
healthcare, and poverty reduction.
World Trade Organization
WTO plays a significant role in
regulating international trade by
setting rules and agreements to
ensure trade flows as smoothly,
predictably, and freely as possible.
Global Corporation
A global corporation, also known
as a multinational corporation
(MNC) or multinational enterprise
(MNE), is a large business
organization that operates and
conducts business activities in
multiple countries around the
world
Global Corporations
Examples of well-known
global corporations
include Apple, Amazon,
Microsoft, Toyota, Coca-
Cola
characteristics
International Operations: Global
corporations have business
operations in multiple countries.
Global Supply Chains: They source
raw materials, components, and
services from different regions to
create products that are then
distributed globally.
characteristics
Global Workforce: Global corporations
employ a diverse workforce that may
consist of employees from various
nationalities and cultural backgrounds.
Technological Innovation: They invest
in research and development to
create new products, services, and
solutions that cater to global
consumer demands.
characteristics
Global Brands: Some global corporations have
strong brand identities recognized
internationally. These brands often become
synonymous with quality, innovation, and
reliability.
Challenges and Opportunities: Operating across

multiple countries introduces challenges
related to cultural differences, regulatory
environments, and geopolitical risks.
multinational corporations
As the name suggests, these
companies have direct
operations in more than a
single country, however, it is
usually not a very large
number.
Nestlé: A Swiss-based food and
beverage company, Nestlé operates
in nearly 190 countries and
offers a wide range of
products including baby food,
bottled water, chocolate,
coffee, and more.
Unilever: A British-Dutch
company, Unilever offers a
variety of consumer goods,
including food, beverages,
cleaning agents, and personal
care products. Brands like
Dove, Axe, and Lipton are
recognized worldwide.
McDonald's: An American fast-
food company, McDonald's is
recognized worldwide for its
restaurants and iconic menu
items. It operates in many
countries and adapts its menu
to local preferences.
Multinational Corporations can be
categorized into four different
types:
-Decentralized Multinational
Corporations
-Centralized Global Corporations
-International Companies
-Transnational Enterprises
• Decentralized Multinational
Corporations
-A decentralized multinational
corporation (MNC) is a type of
multinational organization that
distributes decision-making authority
and operations across various
subsidiaries or divisions located in
different countries.
• Decentralized Multinational
Corporations
Decentralized MNCs grant a
certain level of autonomy to their
subsidiaries. Subsidiaries can make
decisions related to marketing,
production, pricing, consumer’s
preference and other operations
based on local market
conditions.
2. Centralized Global Corporations
•The organizational structure of
a centralized global corporation
has a chief administrative and
management office or head
office.
3. International Companies
These companies engage
in various international
activities, such as
exporting, importing,
foreign direct and
investment.
4. Transnational Enterprises
It is similar concepts to multinational
corporations (MNCs) or multinational enterprises
(MNEs). They refer to large business
organizations that operate and conduct business
activities across multiple countries. Transnational
enterprises often have a global presence and
engage in various international operations, such
as manufacturing, trade, investment, and more.
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Lesson 3: The Structures

Challenges and Opportunities: Operating across

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