Lecture International business - Chapter 12: Analyzing international opportunities

In this chapter, you will explore how companies screen international business opportunities. You will also: Examine the difficulties of conducting international market research, learn about sources of secondary market research data, and understand methods of conducting primary international research.

12 Analyzing International  Opportunities Copyright © 2014 Pearson Education, Inc publishing as Prentice Hall Chapter Objectives • Explain each of the four steps in the marketand 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 publishing as Prentice Hall 12 - Starbucks • Entered Europe and then China • Success rooted in market research • Focus on coffee and societal needs Copyright © 2014 Pearson Education, Inc 12 - Screening Markets and Sites Copyright © 2014 Pearson Education, Inc 12 - Identify Basic Appeal Basic demand Available resources Copyright © 2014 Pearson Education, Inc 12 - Discussion Question What are the four main steps in the process of screening potential new markets and sites for operations? Copyright © 2014 Pearson Education, Inc 12 - Answer to Discussion Question 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 Copyright © 2014 Pearson Education, Inc 12 - Cultural Forces Market selection  Global product  Tailored product Site selection  Education level  Technical skills  Work ethic Copyright © 2014 Pearson Education, Inc 12 - Political and Legal Forces Government regulation   Investment barriers Profit repatriation Government bureaucracy  Administrative delays Political stability  Copyright © 2014 Pearson Education, Inc Unforeseen changes 12 - Political Risk Social unrest can drive out international companies Source: imago stock&people/Newscom Copyright © 2014 Pearson Education, Inc 12 - 10 Answer to Discussion Question The key element of political risk that concerns companies in markets abroad is a Slowing innovation b Spiking logistics costs c Unforeseen political change Copyright © 2014 Pearson Education, Inc 12 - 15 Industrialized Markets Potential  Demographics  Competitor market shares  Import/Export volumes  Distribution network  Marketing approaches  Retail sales levels  Income elasticity Copyright © 2014 Pearson Education, Inc 12 - 16 Emerging Markets Potential  Market size  Market growth rate  Market intensity  Market consumption capacity  Commercial infrastructure  Economic freedom  Market receptivity  Country risk Copyright © 2014 Pearson Education, Inc 12 - 17 Measuring Site Potential      Labor and management Productivity Wage levels Training needs Local infrastructure Copyright © 2014 Pearson Education, Inc 12 - 18 Select the Market or Site Field trips  Engage in negotiations  Meet customers/others  Gain firsthand exposure Competitor analysis      Copyright © 2014 Pearson Education, Inc Competitor numbers/shares Competitor strategies Channel access Customer loyalty Access to inputs 12 - 19 Discussion Question What are the key components of a market-potential indicator and why is it useful to firms exporting to emerging markets? Copyright © 2014 Pearson Education, Inc 12 - 20 Answer to Discussion Question 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 Copyright © 2014 Pearson Education, Inc 12 - 21 International Market Research Data analysis Field research Marketing strategy Source: Alexander Joe/Getty Images/Newscom Copyright © 2014 Pearson Education, Inc 12 - 22 Market Research Difficulties Availability of data Copyright © 2014 Pearson Education, Inc Comparability of data Cultural differences 12 - 23 Top Research Firms Copyright © 2014 Pearson Education, Inc 12 - 24 Secondary Data Sources Copyright © 2014 Pearson Education, Inc  International organizations  Government agencies  Industry/Trade associations  Service organizations  World Wide Web 12 - 25 Methods of Primary Research Methods of Primary Research Trade shows and missions Interviews and focus groups Consumer panels Surveys Environmental scanning Copyright © 2014 Pearson Education, Inc 12 - 26 Discussion Question Each of the following is a difficulty of researching international markets except a Data comparability b Cultural differences c Data availability d Environment scanning Copyright © 2014 Pearson Education, Inc 12 - 27 Answer to Discussion Question Each of the following is a difficulty of researching international markets except a Data comparability b Cultural differences c Data availability d Environment scanning Copyright © 2014 Pearson Education, Inc 12 - 28 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher Printed in the United States of America Copyright © 2014 Pearson Education, Inc 12 - 29 .. .Chapter Objectives • Explain each of the four steps in the marketand site-screening process • Describe the three primary difficulties of conducting international market research... Unforeseen changes 12 - Political Risk Social unrest can drive out international companies Source: imago stock&people/Newscom Copyright © 2014 Pearson Education, Inc 12 - 10 Economic Forces ... liquidity Copyright © 2014 Pearson Education, Inc 12 - 11 Other Forces  Logistics  Country image Copyright © 2014 Pearson Education, Inc 12 - 12 e Business Forces Market access  Infrastructure 