wild_ib6_inppt_12

AnalyzingInternational Opportunities

12

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 2

Chapter Objectives

• Explain each of the four steps in the market- and site-screening process

• Describe the three primary difficulties of conducting international market research

• Identify the main sources of secondary international data and explain their usefulness

• Describe the main methods used to conduct primary international research


StarbucksStarbucks

• Global success• Renewed focus:

• Coffee• Fair-trade image• Market research


Screening Markets and SitesScreening Markets and Sites


Identify Basic AppealIdentify Basic Appeal

Basic demand&

Available resources


Discussion QuestionDiscussion Question

What are the four main steps in the process of screening potential new markets and sites for operations?


Answer to Discussion Answer to Discussion QuestionQuestion

First, a company must identify a location’s basic appeal, whether this be product demand or resource availability. Second, it must assess the national business environment, including cultural, political, legal, and economic forces, as well as the cost of logistics and the image of a country. Third, it must measure the market or site potential, which requires collecting detailed data on each market and site under consideration. And fourth, a company must select the single best market or site by taking field trips to sites making the final cutoff and performing competitive analyses.


Cultural ForcesCultural Forces

Site selection Education level Technical skills Work ethic

Site selection Education level Technical skills Work ethic

Market selection

Global product Tailored product

Market selection

Global product Tailored product


Political and Legal ForcesPolitical and Legal Forces

Government bureaucracy Administrative delays

Political stability Unforeseen changesPolitical stability Unforeseen changes

Government regulation Investment barriers Profit repatriation

Government regulation Investment barriers Profit repatriation


Political RiskPolitical Risk

Social unrest can drive out international companies


Economic ForcesEconomic Forces

Country finances

Currency and liquidity

Country finances

Currency and liquidity


Other ForcesOther Forces

Logistics Logistics

Country image Country image


e-Business Forcese-Business Forces

Market access Infrastructure Content and standards

Market access Infrastructure Content and standards

Legal issues Privacy and security Intellectual property

Legal issues Privacy and security Intellectual property

Financial matters Electronic payments Tariffs and taxation

Financial matters Electronic payments Tariffs and taxation



The key element of

political risk that concerns

companies in markets

abroad is __________.

a. Slowing innovation

b. Spiking logistics costs

c. Unforeseen political change



The key element of

political risk that concerns

companies in markets

abroad is __________.

a. Slowing innovation

b. Spiking logistics costs

c. Unforeseen political change


Industrialized Markets Industrialized Markets

PotentialPotential

Demographics Competitor market shares Import/Export volumes Distribution network Marketing approaches Retail sales levels Income elasticity


Emerging Markets PotentialEmerging Markets Potential

Market size Market growth rate Market intensity Market consumption capacity Commercial infrastructure Economic freedom Market receptivity Country risk


Measuring Site PotentialMeasuring Site Potential

Labor and management Productivity Wage levels Training needs Local infrastructure


Field trips Engage in negotiations Meet customers/others Gain firsthand exposure

Competitor analysis Competitor numbers/shares Competitor strategies Channel access Customer loyalty Access to inputs

Select the Market or SiteSelect the Market or Site



What are the key components of a “market-potential indicator,” and why is it useful to firms evaluating emerging markets?



The market-potential indicator is one way for companies to rank export markets in terms of their appeal. Components to include in a market-potential analysis are market size, market growth rate, market intensity, market consumption capacity, commercial infrastructure, economic freedom, market receptivity, and country risk. The indicator’s usefulness lies in the fact that hard data on market size is often unavailable in emerging markets.


International Market ResearchInternational Market Research

Marketing strategyField research

Data analysis


Market Research DifficultiesMarket Research Difficulties

CulturalCulturaldifferencesdifferences

AvailabilityAvailabilityof dataof data

ComparabilityComparabilityof dataof data


Secondary Data SourcesSecondary Data Sources

International organizations

Government agencies

Industry/Trade associations

Service organizations

Internet and World Wide Web


Methods of Primary ResearchMethods of Primary ResearchMethods of Primary ResearchMethods of Primary Research

Trade shows and missionsTrade shows and missions

Interviews and focus groupsInterviews and focus groups

Consumer panelsConsumer panels

Environmental scanningEnvironmental scanning

SurveysSurveys



Each of the following is a difficulty of researching international markets except __________.

a. Data comparabilityb. Cultural differencesc. Data availabilityd. Environment scanning



Each of the following is a difficulty of researching international markets except __________.

a. Data comparabilityb. Cultural differencesc. Data availabilityd. Environment scanning

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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

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sitescreening processdescribe

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