2. TOPIC 3 HOW DOES A COMPANY DECIDE WHICH COUNTRIES TO TARGET? ASSESSMENT OF COUNTRY MARKETS

3. Will be able to evaluate why certain factors attract a business to a country Evaluation ~ GCE Grade A* Will be able to propose countries that are attractive to businesses Synthesis ~ GCE Grade A Will be able to analyse the factors that attract a business to a country Analysis ~ GCE Grade B Will be able to demonstrate understanding by using examples/cases Application ~ GCE Grade C Will be able to explain the attractiveness of some countries Comprehension ~ GCE Grade D Will be able to recall Porter’s 5 Forces Knowledge ~ GCE Grade E

4. Success Criteria

5. Assessment of country markets  Careful assessment of attractiveness of country’s market involves consideration of many different factors:  Spending Potential  Culture  Logistics  Competition

6. Spending Potential  Size of population and level of income determine the number of consumers who are potential customers  Inferior goods will not benefit from rising incomes as people might lose interest in them if their incomes rise  Structure of population is also important  High proportion of young people = attract children's/young people’s products  Ageing populations = high spending on products for senior citizens

7. Culture  Variations on culture have a large impact on how business is done and what is bought  E.g Indian consumers are accustomed to small shops and interaction with traders to check quality and barter prices  There are also variations in Marketing  Direct and simple statements in some countries  Subtle development of brand images in other countries  Regulations on advert content and target audiences

8. Logistics  Simple distance is not always a problem  Shipping is low-cost way for non-perishable goods to reach countries but is slower than air transport  Poor quality roads and transport systems can cause problems in some countries  Selling in a new country requires existence of suitable distribution and retailing systems

9. Competition  Levels of competition in potential markets will determine market attractiveness  If already intensely competitive, profit margins will be low and so the market is less attractive  Porter’s 5 forces provide a way to look at competitiveness

10. Porter’s 5 Forces Competitive rivalry in an industry Bargaining power of customers Threat of new entrants Threat of substitute products Bargaining power of suppliers

11. Why has beer been in the news???

12.  http://www.bloomberg.com/news/articles/2015-10-13/ab-inbev-agrees-to-buy-sabmiller-for-104-billion-in-record-deal http://www.bloomberg.com/news/articles/2015-10-13/ab-inbev-agrees-to-buy-sabmiller-for-104-billion-in-record-deal

13. Homework task

14. Task  Use the “factors” sheet to help you produce posters outlining all the factors you think are relevant in influencing a company’s decision to enter that market.  You must use a recent example following research of current affairs in the world of business and economics

15. Potential Market Scenarios  Jack Daniel’s (US whisky company) wanting to sell its products in Ireland.  Starbucks wanting to set up coffee shops in China.  Motorola wanting to make and sell mobile phones in Nigeria.  A UK-based accountancy firm wanting to set up and provide accountancy services in New York, USA.  Microsoft outsourcing its software development to India.

16.  On your cards Topic 3: Assessment of country markets  Write down:  2 or more things you found easy to understand/ remember from the lesson  What did you find difficult to understand Exit pass

17. Will be able to evaluate why certain factors attract a business to a country Evaluation ~ GCE Grade A* Will be able to propose countries that are attractive to businesses Synthesis ~ GCE Grade A Will be able to analyse the factors that attract a business to a country Analysis ~ GCE Grade B Will be able to demonstrate understanding by using examples/cases Application ~ GCE Grade C Will be able to explain the attractiveness of some countries Comprehension ~ GCE Grade D Will be able to recall Porter’s 5 Forces Knowledge ~ GCE Grade E

18. Success Criteria