analyzing international opportunities 12 copyright © 2014 pearson education, inc. publishing as...

AnalyzingInternational Opportunities

12

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2014 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

Copyright © 2014 Pearson Education, Inc. 12 - 3

StarbucksStarbucks

• Entered Europe and then China• Success rooted in market research• Focus on coffee and societal needs


Screening Markets and SitesScreening Markets and Sites


Identify Basic AppealIdentify Basic Appeal

Available resources

Basic demand


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

The first step is to identify a location’s basic appeal in terms of product demand or resource availability. The second step is to analyze all forces in the national business environment. The third step is to measure market or site potential by collecting data on each one being considered. The fourth step is to select the best market or site by taking field trips 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

Source: imago stock&people/NewscomSource: imago stock&people/Newscom


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


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 exporting to emerging markets?



The main components of a market-potential indicator are market size, market growth rate, market intensity, market consumption capacity, commercial infrastructure, economic freedom, market receptivity, and country risk. The indicator provides a quantitative measure of market size when data is limited in emerging markets.


International Market ResearchInternational Market Research

Marketing strategyField research

Data analysis

Source: Alexander Joe/Getty Images/NewscomSource: Alexander Joe/Getty Images/Newscom


Market Research DifficultiesMarket Research Difficulties

CulturalCulturaldifferencesdifferences

AvailabilityAvailabilityof dataof data

ComparabilityComparabilityof dataof data


Top Research FirmsTop Research Firms


Secondary Data SourcesSecondary Data Sources

International organizations

Government agencies

Industry/Trade associations

Service organizations

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

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