1. Assessing Countries’ Attractiveness
Suresh George

2. Outline of the lecture In depth Analysis of Markets
Market & Sales Potential
Resources and databases for the search

3. Recap of Lecture 5

4. Introduction Micro Analyses of selected markets
No Market is 100% attractive on all variables- Trade-offs based on firm and market attractiveness
Attractiveness is a fluid concept- Change over time with macro-economic developments/country specific events e.g Turkey in 2013
The use of Industry specific variables to qualify markets

5. Perform an in-Depth Market Analysis of the two best markets

6. The deployment of resources in target market
Source:Janavaras.B, Paladini .S and George S (2013). Going Global: A Practical Guide Pearson

7. Contacts
Research potential agents, distributors, foreign governments, associations, and organizations that can help the company establish itself in the new countries
Select the strongest contacts by clicking on the bubbles corresponding to the strongest contacts in the software
Evaluate each contact’s quality and strength on a scale 1 – 5, 1 being least favorable and 5 being most favorable

8. Assess market Potential
Industry market potential = Likely sales for all firms in industry over specific time
Variables
Size and Growth of market and trends in the industry
Tariff and non tariff trade barriers to entry
Regulations
Availability of distribution for your products
Unique customer requirements and preferences
Industry specific potential indicators of demand
Methods
Simple trend Analysis
Monitoring of Key industry specific indicators, Key customers
Following your key customers around the world
Supplier network data and information
International Trade fairs

9. Market and Company Sales Potential in GMMSO3
Total Market Potential (TMP)- Estimate the total market potential (TMP) in both selected top country for your product by using the formula:
TMP = a x b x c
Where, 
a = Number of potential (eligible/qualified) consumers:
b = Frequency of purchase on an annual basis:
c = Selling price of the product
Country 1
Country 2
a = Number of potential (eligible/qualified) consumers:
b = Frequency of purchase on an annual basis:
c = Selling price of the product
TMP
Evaluation of the TMP on a scale of 1-5 1 2 3 4 5
Source:Janavaras.B, Paladini .S and George S (2013). Going Global: A Practical Guide Pearson

10. Company Sales Potential (CSP)
Estimate of share of the Annual Industry sales expected in a target market
Variables
Pricing and financing of sales
Financial Resources
HR assets
The partner capabilities
Access to distribution Channels
Market penetration timetable – Gradual ( cede market share to competition) /Vs rapid market entry( FMA at expense of firm resources and capabilities0
Special Links/Contacts with Market
Firm Reputation/Brand Equity
Method
Analysis of the competitive environment
Trade Audits
Survey of customers/distributors
Estimates from local partners
Test Marketing

11. Finding CSP from known sources
Use of Proxy Indicators- Use information about a known category to infer potential of another Product
Analogy method – Use of known statistics of one country correlated to another
Estimate company sales potential (CSP) for the product: CSP = Total Market Potential (TMP) x Desired Market Share %
Country 1
Country 2
Total Market Potential (TMP)
Desired Market Share (%)
Company Sales Potential (CSP)= TMP X desired market share
Source:Janavaras.B, Paladini .S and George S (2013). Going Global: A Practical Guide Pearson

12. Source:Janavaras. B, Paladini. S and George S (2013)
Source:Janavaras.B, Paladini .S and George S (2013). Going Global: A Practical Guide Pearson

13. Competitive Analysis
Choose the top two competitors that the company will have to compete with in each country
Will local or international competitors be a bigger threat to the company’s success?
Do consumers in the specific countries favor local companies over international companies?
Rate the two counties threat of competition on a scale of 1-5, 1 being the biggest threat and 5 being the less threatening.

14. CSP on GMMSO3 Country Market X Competitor 1 Competitor Name:
Product/Service Name:
Location of Headquarters (country):
Total Sales (countrywide):
Total Sales (worldwide):
Number of Employees
Profile
Distribution E-Commerce:
Pricing Strategy:
Product Attributes and Benefits:
Promotion Strategy
Quality:
Service:
Target Market Profile:
Evaluation Criteria
Country 1
Country 2
Degree and Level of Market Competition in each country 1 2 3 4 5

15. Market entry Conditions

16. Import Regulations
Use the matrix below to explain what types of regulations are present in each country.
Regulations
Country 1
Country 2
Administrative Barriers  1 2 3 4 5
Import Licensing Requirements 
Quotas 
Tariffs 
Any additional regulations
Explanation for each of the regulations and your perception of its impact on your product

17. Foreign Direct Investment (FDI) Screening
Can foreign companies borrow locally?
Does the government restrict the amount or type of investment?
Does the government restrict the Repatriation of Earnings
Are foreign based companies allowed 100% Equity  ownership of domestic firms? 
Are foreign companies allowed to establish their own retail establishments?
Long Term Prospects for Growth & returns
The cost of doing Business vs. Market potential – Consider price, availability of commercial infrastructure, tax rates, wages, skills and capital markets
Country Risk including regulatory, financial, political, cultural barriers and legal environment for IPP
The intensity of competition from other firms present in the market or those who can move there
Government Incentives – Tax holidays /Low cost Loans etc

18. Source: A.T. Kearney 2012 FDI confidence Index

19. Financial and Market Entry Conditions

20. Tax Rates Tax Rates Country 1 Country 2 1 2 3 4 51 2 3 4 5
Corporate Tax rates are favorable 
Personal Tax rates are favorable 
Any additional regulations
Explanation for each of the Tax rates and your perception of its impact on your product/service

21. Foreign Exchange Performance
Foreign exchange rate performance
Country 1
Country 2 1 2 3 4 5
The country’s currency is convertible 
The country’s current account is in good standing (Balance of Payments) 
The currency of the country has been stable 
Any additional regulations
Explanation for each of the statements and your perception of its impact on your product/service

22. Labor issues Labour Issues Country 1 Country 2 1 2 3 4 51 2 3 4 5
Child labor issues 
Labor wage rates ) 
Management-labor relations
Strength of labor unions 
Any additional regulations
Explanation for each of the issues and your perception of its impact on your product/service

23. Country Infrastructures1 2 3 4 5
Banking system
Energy
Internet connections
Telecommunications system 
Transportation systems
Any additional regulations
Explanation for each of the infrastructure issues and your perception of its impact on your product/service

24. Market Channel Conditions
Country 1
Country 2 1 2 3 4 5
Distribution channels are regulated by the government 
Existing channels provide adequate national market coverage
The company will be able to distribute its product/service using existing channels 
Any additional regulations
Explanation for each of the market channel conditions and your perception of its impact on your product/service

25. Overall Market Ranking
VARIABLES
WEIGHT
AVERAGE RANK
WEIGHTED TOTAL
Country 1
Country 2
Country 1
Country 2
CONTACTS (average)
MARKET & COMPANY SALES POTENTIAL
COMPETITION
COUNTRY ENTRY CONDITIONS
FINANCIAL & MARKET CONDITIONS
Total weight (100%)
Average rank sum
Weighted Total

26. Tools and Resources

27. Market Potential Index

28. Industry potential Data Sources
Global Edge
Export.Gov
UKTI
UNCTAD
WTO
DoingBusiness.org
IMF
AT Kearney
US Commercial Service - Market Research Library-
Country Commercial Guides

29. References
Janavaras.B, Paladini .S and George S (2013). Going Global: A Practical Guide Pearson