Foreign Market Choice - Poznań University of Economics and Business

Foreign market entry and growth Agata Linkiewicz, M.A. Department of International Competitiveness Foreign location choice  INDIVIDUALLY List top 3 factors that, in your opinion, need to be considered while choosing the foreign location of a business. ...

Foreign market entry and growth Agata Linkiewicz, M.A. Department of International Competitiveness Foreign location choice  INDIVIDUALLY List top 3 factors that, in your opinion, need to be considered while choosing the foreign location of a business.  GROUPS Share your list with your colleague. Do you have the same factors mentioned? List them in order of importance. Justify the one you consider as the most important.  GROUPS Present your list to the class. Look at the list on the table. Which of the factors included do you consider as the most important now? Have you changed your mind?  Foreign market choice I: identifying evaluation aspects Environment for potential Firm foreign destinations Sector/industry, type of business operations Macro-environment Resources to be leveraged (PEST) Motives and objectives of Competitive environment internationalisation Direct rivals Experience in foreign Industry/sector markets internationalisation degree Existing business networks x number of Number of considered Number of considered x1 considered aspects aspects markets Relatively small number of aspects Significant number of aspects  Foreign market choice II: selecting evaluation aspects Firm Environment for potential foreign destinations Sector/industry, type of business Selection Macro- operations environment Resources to be (PEST) leveraged Competitive Key aspects of the Motives and environment firm perspective and objectives of Direct rivals their weights internationalisation Industry/sector Experience in internationalisatio foreign markets n degree Existing business networks  Foreign market choice II: example Tymbark (Maspex Group) Environment for potential foreign Selection Production of destinations Population size beverages and Avg. beverage processed fruits Macro- consumption per 3 million USD,strong environment inhabitant brand, well-perceived products, latest (PEST) Political stability Customs and tariff production technology Competitive barriers (appl. to Market motives -> sales environment Direct rivals beverages) increase and profitability Industry/sector Infrastructure Experience in foreign markets as exporter and internationalisatio Shop development No. of competitors, producer (Hungary, n degree their origin and Czech Rep., Romunia, maret share Slovakia). Broad extant network of business ties with suppliers and clients  Foreign market choice Measurability – to what extent can you measure and evaluate a given aspect – Average beverage consumption per inhabitant – Political stability Data availability – Data sources: institutions, databases, rankings and reports Scaling – Scale types, – Scale unification – Intervals  Foreign market choice o Return to earlier identified, but not considered, relevant aspects o Overall evaluation of aspects o Calculations and final selection  Foreign market choice Aspect Note (1-5) Weight (sum Note x 1) weight Slovenia Political stability 3 0,1 0,3 Population size 4 0,1 0,4 Geographic distance 4 0,05 0,2 No. of competitors, their origin and market share 5 0,3 1,5 … … … … SUM 2,4 France Political stability 5 0,1 0,5 Population size 5 0,1 0,5 Geographic distance 2 0,05 0,1 No. of competitors, their origin and market share 1 0,3 0,3 … … … … SUM 1,4  Entities to help with potential markets’ analysis The World Factbook Population Division EN Transparency International Organisation for Economic Cooperation and Development (OECD) World Tourism Organisation (UNWTO) World Travel & Tourism Council (WTTC) European Travel Commission (ETC) Websites – e.g. Trading economics tradingeconomics.com THANK YOU