Mpi Indicators

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BY: SH

The Market Potential Index is used to compare countries that are in transition and entering the markets. This allows companies to determine if a country has the capacity to market a product successfully. Michigan State University Center for International Business Education and Research implements the study on a yearly basis in order to compare and rank the countries on market potential through eight different dimensions with a scale that ranges from one to one-hundred. It is important to briefly discuss each dimension to better understand how MSU-CIBER came up with the results of the study. Market size is the first dimension and it is based on the comparison of how many people are in the urban population and how much electricity is used by each citizen. It would be easy to assume that if a person has electricity and the amount consumed is above average then technology would likely be available. If the technology was not available then the basics are there to introduce it to the population under the right circumstances. Market growth rate is based on an average of energy use by the population. Gross Domestic Product growth rate is compared to the energy use and this shows the productivity rate of the country. Productivity leads to more goods and services which spurs economic growth. This is a fact that will entice investors because of the great potential for growth. Market intensity shows the consumption of the population. The GNP average is also prevalent because such things as wages and the earnings of a corporation is a major factor. The population has to have a way to purchase the goods or there would not be a reason to enter the market. Market consumption capacity compares the average income of a country with the average of what they are consuming. There needs to be a future demand for goods or services in order for a company to survive. There has to be enough space in the market for competition. Commercial infrastructure is based on the...
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