1. Analyzing International Opportunities
Explain market-and site-screening processes
Analyze international market research
Learn to evaluate new investment projects
Study issues that are important to evaluating investment proposals

2. Screening
Potential Markets
and Sites

3. Identify Basic Appeal
Basic
Demand
Availability
of Resources

4. The National Business Environment
Cultural
Political
and Legal
Economic
and Financial
Transporting
Materials
Image of
the Country

5. Measure Market Potential
Industrialized
Markets
Measure
Market
Potential
Emerging
Markets

6. Measure Site Potential
Quality of Local Resources
Investment of Time and Money
Stability of Local Infrastructure

7. Simplified Grid to Compare Countries for Market Penetration
VARIABLE WEIGHT I II III IV V
1. Acceptable (A), Unacceptable (U) factors
a. Allows 100% ownership U A A A A
b. Allows licensing to majority-owned subsidiary A A A A A
2. Return (higher number = preferred rating)
a. Size of investment needed
b. Direct costs
c. Tax rate
d. Market size, present
e. Market size, 3–10 years
f. Market share, immediate potential (0–2 years)
g. Market share, 3–10 years
TOTAL
3. Risk (lower number = preferred rating)
a. Market loss, 3–10 years
b. Exchange problems
c. Political-unrest potential
d. Business laws, present
e. Business laws, 3–10 years
TOTAL

8. Select the Market or Site
Field
Trips
Competitor
Analysis

9. Primary International
Trade Shows
and Trade Missions
Interviews and
Focus Groups
Primary International
Research
Surveys
Environmental
Scanning

10. Evaluating Investment Proposals
Estimating Future Cash Flows
Present Value
Return on Investment
Risk and Return

11. Comparison of ROI Certainty
ROI AS
PERCENTAGE 5 10 15 20
INVESTMENT A
WEIGHTED
PROBABILITY VALUE
Estimated ROI
10%
INVESTMENT B
Comparison of ROI Certainty

12. Where the investment should be made and explain your choice.
Discussion
Feasibility studies showed that a $1 million investment would yield the following return for a U.S. firm after taxes:
Where the investment should be made and explain your choice.
Country
Return
The United States 7%
Israel
10%
Brazil
13%
Zambia
16%

13. Evolution of the Entry Mode Decision
Experience
Wholly Owned
Subsidiary
Management Contract
Joint Venture/Alliance
Franchising
Control
Turnkey Project
Licensing
Exporting
Risk

14. Strategic Factors in Selecting an Entry Mode
Market size
Cultural environment
Political and legal environment
Production and shipping costs