ASSESSING GLOBAL MARKET OPPORTUNITIES
Global Market Opportunity
Global market opportunity refers to favourable combination of circumstances, locations, or timing that offer prospects for exporting, investing, sourcing, or partnering in foreign markets.
Global business opportunities include: marketing products and services; establishing factories or other production facilities to produce its offerings more competently or cost-effectively;
procuring raw materials or components, services of lower cost or superior quality; Entering into
collaborative arrangements with foreign partners.
Task 1.Organizational Readiness
One of the best-known tools is CORE(Company Readiness to Export) CORE asks managers questions about their organizational resources, skills, and motivation to arrive at an objective assessment of the firm’s readiness to successfully engage in exporting. CORE also generates assessments on both “Organizational Readiness” and “Product Readiness.
Task 2.Product Suitability
To conduct a systematic assessment of the suitability of the firm's products and services for international customers; Evaluate the degree of the fit between the product or service and customer needs. Criteria:
Assess the firm’s products and services with regard to: foreign customer characteristics and requirements government mandated regulations expectations of channel intermediaries’ characteristics of competitors’ offerings.
Sell well in the domestic market. Those that are received well at home are likely to succeed abroad, especially where similar needs and conditions exist. Cater to universal needs.
Address a need not well served in particular foreign markets. Address a new or emergent need abroad
Issues that Determine Potential Product
Who initiates purchasing?
Who uses the product or service?
Why do people buy the product or the service?
Where do consumers purchase the product or service?
Economic, cultural, geographic, and other factors in the target market can limit sales?
Task 3.Country Screening
To reduce the number of countries that warrant in-depth investigation as potential target markets to a manageable few. Criteria:
Market size and growth rate; market intensity (that is buying power of the residents in terms of income level); consumption capacity (that size and growth rate of the country’s middle class); country’s receptivity to imports; infrastructure appropriate for doing business; economic freedom; political risk.
Focus of Screening Varies with Entry Strategy
Firms that seek to source from foreign suppliers need to identify countries where capable suppliers are located. Once a firm chooses a particular country, it needs to ensure that conditions for importing from the country are favourable. For firms looking to make a direct investment in foreign markets, it is best to focus on countries that promise long-term growth, substantial returns, while posing relatively low political risk. • Exporting firms should target countries with low tariff barriers, steady demand, and qualified intermediaries.
Gateway Countries and Regional Hubs’
Managers may target so-called gateway countries or regional hubs that serve as entry points to nearby or affiliated markets. Singapore has traditionally served as the gateway to Southeast Asian countries; Hong Kong is an important gateway to China; Turkey is a good platform for entering the Central Asian republics; and Finland provides business-friendly access to the former Soviet Union. Firms base their operations in a gateway country so they can serve the larger, adjacent region.
Gradual Elimination Method for Screening Countries
The manager starts with a large number of prospective target countries and then gradually narrows choices by examining increasingly specific information obtained via research. The objective is to reduce to a manageable few the number of countries...
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