Frank Davis Comes Madagascar
General evaluations about the case
Frank Davis works for a U.S food processing company Summit Foods, and he visits Madagascar because the company is interested in the local spices market and wants to evaluate if there are good opportunities to enter this market. As we know the cost to enter a new market depends on the company marketing strength, on the ability to access to low cost product and effective production, the experience of the company, the effectiveness of the company infrastructure in terms of organization, technological efforts likely to be successful as measured by the strength of the development organization and the availability of adequate operating capital.
Once in Madagascar the issues with which he must deal are numerous, beginning from the traffic, weather, energy, infrastructure, etc.
But when we speak for a foreign market the most important issues are: Entry barriers, the political and economical stabilization, inflation, currency, foreign competition, legislation, the different culture, and the religion.
The best method to do the market analysis is the market screening, which has five stages and includes all what I mentioned before. As he was informed the 80% of spices grown in Madagascar were exported to Europe, which means that only 20% of the spices were exported to the other continents including here the US. Another important point on the case is the Free Trade Zone, which is currently the major focus of direct foreign investment in Madagascar.
He has to take in consideration some difficulties as: the foreigners are not legally eligible to hold real properties, the bureaucracy from one ministry to another and the bank system.
Frank during his stay in Madagascar meets also a local businessman, but from their conversation I understood, that there is no hope for collaboration, because the Malagasy businessman was too short and too formal in his answers, and had no curiosity to learn more about Summit Foods. Of course in this case we
Frank Davis works for a U.S food processing company Summit Foods, and he visits Madagascar because the company is interested in the local spices market and wants to evaluate if there are good opportunities to enter this market. As we know the cost to enter a new market depends on the company marketing strength, on the ability to access to low cost product and effective production, the experience of the company, the effectiveness of the company infrastructure in terms of organization, technological efforts likely to be successful as measured by the strength of the development organization and the availability of adequate operating capital.
Once in Madagascar the issues with which he must deal are numerous, beginning from the traffic, weather, energy, infrastructure, etc.
But when we speak for a foreign market the most important issues are: Entry barriers, the political and economical stabilization, inflation, currency, foreign competition, legislation, the different culture, and the religion.
The best method to do the market analysis is the market screening, which has five stages and includes all what I mentioned before. As he was informed the 80% of spices grown in Madagascar were exported to Europe, which means that only 20% of the spices were exported to the other continents including here the US. Another important point on the case is the Free Trade Zone, which is currently the major focus of direct foreign investment in Madagascar.
He has to take in consideration some difficulties as: the foreigners are not legally eligible to hold real properties, the bureaucracy from one ministry to another and the bank system.
Frank during his stay in Madagascar meets also a local businessman, but from their conversation I understood, that there is no hope for collaboration, because the Malagasy businessman was too short and too formal in his answers, and had no curiosity to learn more about Summit Foods. Of course in this case we