Midterm Exam Flashcards
A situation in which separate markets for the same product became one single market
Market integration
It is an indicator that explain how much different markets are related to each other
Market integration
3 innovation changed global corporation
- digitalization
- global communication
- structural transformation of global commerce
3 structural periods
- investment based
- trade-based globalization
- digital globalization
Major driver of corporate development
FDI - Foreign direct investment
The merger of two companies that has similar level in production
Horizontal or lateral integration
A competitive strategy by which company take over control over one or more stages in production or distribution
Vertical integration
Business activity is expanded to take control of direct distribution or supply of company’s products
Forward vertical integration
A process in which company purchases or internally produces segments of its supply chain
Backward vertical integration
Its the combination of two or more business entities engaged in different businesses
Conglomeration
Horizontal integration
Advantages & disadvantages
Advantages
- lower cost, higher power in the market, increased differentiation, reduced competition
Disadvantages
- tough transition change
- lack of competition
Vertical integration advantages and disadvantages
Advantages
- doesn’t have to rely on suppliers, gives a company economic scale, retailer knows what is selling well, lower price
Disadvantages
- expense, loss of focus, cultural diversity in the workplace, reduces flexibility
It an organization that uses economic resources or inputs to provide products or services to customers in exchange for money
Business entity
Type of business
Service business, merchandising, manufacturing, hybrid
Its a type of business that provide intangible products service without physical goods
Service business
