Download 1. Macro Level Research

A Model For Selecting Foreign Markets
1. Macro Level Research
3. Micro Level Research
(General Market Potential)
(Specific Factors Affecting the Product)
Existing and potential competition
Ease of entry
Reliability of information
Sales Projections
Cost of Entry
Probably product acceptance
Profit potential
“Feel”
Economic statistics
The political environment
Social structure
Geographic features
Preliminary Opportunities
2. General Market Relating
to the Product
Growth trends for similar products
Cultural acceptance of such products
Availability of market data
Market size
State of development
Taxes and duties
Possible Opportunities
Rejected
Countries
Probable Opportunities
4. Target Markets
Corporate factors affecting
implementation
Country Priority Listings
Opportunity Matrix
Market Opportunity
L
M
H
H
M
Business & Political Risk
Measured Over Time
L
Market Stage
Infancy
1.
Customers
2.
Product Introduction
3.
Distribution
4.
Price
5.
Competitive Strategies
Developing
(Types of after markets.)
Mature
Criteria Used in Choosing Entry Strategies
External Criteria
Internal Criteria
Market risk factor
Time orientation
Competition in the market
Need for control
Political conditions
Degree of internationalization
Market conditions
Urgency of going international
Future market potential
Ability to handle international risk
Availability of desired distribution outlets
Availability of venture capital
Availability of know-how
Entry Decisions: Strategic Parameters
Input
Process
Output
A strategic plan including:
* Motivation(s) for entry
* Inventory of own
resources
* Inventory of competitors
resources
* Market intelligence
* IP protection

Decision rules for
site(s) selection

* Mode of entry
(risks control, legal issues)
* Operational and
implementation programs
International Market Entry – Funnel Approach
Regional Focus
• The “Triad”
Japan
North America
Europe
Mode of Entry
Identification
of
A Lead Country
(Function of the
Firm Size)
• Emerging Markets
Latin America
Venezuela
Argentina
Brazil
Columbia
Chile
Trading companies
Exporting
Licensing
Regional Focus
Using an entry into one
National marketing as
a stepping stone for
launching market
Penetration into other
markets
Manufacturing
Joint Ventures
Strategic Alliances
Management Contracts
Pacific Basin
China
India
Middle East
Or various clustering schemes
e.g. “seekers” vs. Climbers*
•Less Developing Regions
*A popular clustering approach consists of criteria such as development level (urbanization, life expectancy, infant
mortality, literacy rte, per capita GDP), Economic Performance (GPD, inflation, investment foreign trade and debt,
etc., and Political and Economic Liberalization.
The Spectrum of International Business Involvement
Inactive
Exporting
Licensing
Joint
Venture
Franchising
Proactive
Exporting
Turnkey
Contract
Less
involved
Strategic
Alliance
Management
Contract
Direct
Investment
More
involved
Contractual
Relations/Arrangements