International Market Analysis

Study Notes

Market environment encompasses market dynamics, institutions (e.g., groups, organizations, consumers, communication infrastructure, political, cultural, economical, legal, and social factors), and technological advancements within the global environment.
Key market characteristics include size, attractiveness (access, growth, product needs, purchasing habits, terms, market existence), and the potential for effective market penetration.
Understanding the "real" market (accessible) is crucial before formulating a strategy. Factors influencing demand include climate, physical environment, consumer benefits, education, habits, purchasing power, and demand for specific items or needs.
Market analysis considers purchasing power, legal systems, infrastructure, geographic conditions, financial systems, business mentalities, customer preferences, and investment budgets along with regulations.
Analyzing potential market entry and developing strategies relies on understanding market coverage (geographical, channel), market intensity (presence, share), and market effectiveness (marketing efficiency).
International product life-cycle considerations include cash flow, revenue, and time.
Competitive analysis needs a clear understanding of the competitive landscape, considering competitors and client power, service, partnership, price, technological capability, and production capabilities.

Various entry modes exist: exporting, licensing, franchising, joint ventures, and foreign direct investment.
Entry modes each have associated advantages and disadvantages. Exporting is low cost but has high transport costs and trade barriers. Licensing limits control over technology, while joint ventures share costs and risks but may lack control.
Companies must carefully consider their vision, risk tolerance, investment capital, and desired control when choosing an entry mode or strategy.

Understanding customer segments through questions about who buys, what is bought, where, when, how, and why. Key factors include discriminating features and critical purchase influences.
A comparative analysis of countries with similar market potential identifies key characteristics and discriminating variables, such as market size, economic development, channels, communications and competition.
The CAGE Framework (Cultural, Administrative/Political, Geographic, and Economic distance) is used to assess market entry challenges

Internal & external consistency of company objectives and potential market constraints necessitates a thorough review
Identifying variables that eliminate non-suitable countries, based on factors like alcohol content, political/legal instability, financial, image, and ecological risks (eg. sun exposure for different product categories).
Identifying discriminating variables, such as acceptance of the product and availability of distribution and communication channels, market size, and levels of economic development.
Effective market selection requires a balance of diverse information sources (international, national, trade, internal).

Global e-commerce is experiencing rapid growth, with increasingly important considerations for online customer behavior (privacy, individuality, wellness, convenience, connectivity), market concentration strategies, and the need for innovative business models.
Digitalization, and the disintermediation of supply chains, through innovative technologies and business models, can improve cost structures and generate strong competitive advantages in international marketplaces.
"Viral" marketing and recommendations play a crucial role in consumer purchasing decisions.