Researching and Analysing Overseas Markets

Background information Five rules for international research Entry evaluation procedure
Stage 1 - Country identification Stage 2 - Preliminary screening Stage 3 - In-Depth screening Stage 4 - Final selection

Market information
Market potential Consumer / customer attitudes and behaviour Channels of distribution Communications and media Market sources New products

Competitive information
Competitive business strategy and goals (mission and rationale of the company) Competitive functional strategies and programmes (target markets, marketing mix, etc) Competitive operations (morale, employee transfers, i.e. detail)

Foreign exchange
Balance of payments, interest rates, etc Prescriptive information e.g incentives, controls, regulations. Country monetary and fiscal policy Expectations of bankers, traders, analysts, etc Government policy in relation to its own competitiveness e.g China, USA

Resource information
Human resources Money Raw materials Acquisitions and mergers, joint ventures

General conditions
Economic factors - e.g. growth Social factors e.g. customs, attitudes Political factors e.g investment climate Scientific and technological factors - major developments and trends Management and administrative factors e.g. report procedure

Sources of information
Human sources e.g company executives Documentary sources e.g too much! Perception sources e.g. what we see and hear Information and media
face-to-face conversation telex/fax/e-mail sight, smell, taste

Five rules for international research

One:
what information do I need? Where can I get this information? Why do I need this information? When do I need this information? What is this information worth in ? What is the cost of not obtaining this information?

 Two: Start with desk research Three: Identify the type of information that is available from overseas sources Four: Know where to look (or find somebody that does) Five: Do not assume that the information that you gain is comparable or complete. Keegan 1995

Entry evaluation procedure

Stage 1 - Country identification Stage 2 - Preliminary screening Stage 3 - In-Depth screening Stage 4 - Final selection

Stage 1 - Country identification

Candidate countries are identified and listed broadly based on general statistical information conduct population comparisons to predict market potential
Indonesia 18 million, Malaysia 17 million Brazil 50 million, Chile 13 million

Stage 2 - Preliminary screening

Rating the identified countries macro level - political stability, geographical distance, economic development Weed out countries from consideration anticipated cost of entry are calculated e.g. warehousing, product support, distribution

Stage 3 - In-Depth screening

Core of attractiveness evaluation data specific to industry/market Market size Market growth - business cycle, computing rates of growth competitive intensity - e.g. US Dept of Commerce Market Shares Report Trade barriers

Stage 4 - Final selection

Objectives brought to bear for a match Revenues and costs are compared for leverage Weights can be added to criteria based on objectives This leads to a final ranking Personal visits are made. Direct experience leads to final decision
Johansson (1999)