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50 Cards in this Set

  • Front
  • Back
Is the danger that political and military upheaval will change the nation’s economic rules and regulations overnight
political risk
revolution, external aggression
type of political risk
general instability stage :1
import restrictions,local content rules, taxes ,export req.
type of political risk
level 3: operations
nationalism, contract revocation

type of political risk
level 2: expropriation
repatriation restrictions, exchange rates

type of political risk
level 4: finance
Climate is most obvious environmental factor affecting people’s behavior

one of the environmental dimensions
Physical Environment
Cultural influences are pervasive in most country markets

one of the environmental dimensions
Sociocultural Environment
The level of economic development is a major determinant of local buyer behavior

one of the environmental dimensions
Economic Environment
The institutional framework within which markets function is designed to enable or prohibit certain business practices

one of the environmental dimensions
Regulatory Environment
The local marketer must read competitive signals to judge the competitors’ future actions
Competitive Signaling
(ways to research a competitor)
It is possible to get a sense of the financial capability of the competition from annual reports, 10K or corresponding stock exchange filings
Understanding the organizational structure of the competitors helps gauge their local strengths
ways to research a competitor
The first cut is used to identify candidate countries
Country Identification
Involves rating the identified countries on macrolevel indicators
Preliminary screening
Involves assessing market potential and actual market size and other country related factors
In-depth screening
involves selection of the country to enter cannot and should not be made until personal visits are made to the country and direct experience acquired managers
Final selection
Four stages for evaluating candidates for foreign market entry
Country Identification
Preliminary screening
In-depth screening
Final selection
A direct measure of market size can be computed from local production, minus exports, plus imports
market size

in depth screening criteria
Growth estimates can be obtained by getting the market size measures for different years and computing the growth rates
market growth

in depth screening criteria
local production - EX + Im
Market Size

in depth screening criteria
Level of competition can be measured by the number of competitors in the market and the relative size distribution of market shares
Competitive Intensity


in depth screening criteria
Tariffs, taxes, duties, and transportation costs can be ascertained from official government publications
trade barriers

in depth screening criteria
Assesses what is likely to be obtained given the probable situation and contemplated strategies
sales forecast
The focus is on the derivation of sales forecasts at two levels
Industry sales and market share
Forecasted Industry Sales x Forecasted Market Share
forecast sales
what is likely to be obtained given the probable situation and contemplated strategies
sales forecast
what could potentially be achieved under “ideal” conditions
Market Potential
lack of data means forecasting becomes more subjective
is what stage
early stage
with data available, quantitative forecasts are feasible

is what stage
later stage
Three forecasting techniques used in the early stages of the PLC
“Build-up” Method
Forecasting by Analogy
Judgmental Methods
Generally attempt to introduce a certain amount of rigor and reliability into otherwise quite arbitrary guesses
Judgmental Methods
Based on the premise that sales of the product in one “lagging” country will show similarities to sales in another “leading” country
Forecasting by Analogy
Derived from market sales estimated on the basis of separate estimates from individuals knowledgeable about certain market segments
Build-up” Method
Judgmental Forecasting
4 types
The Jury Technique
Expert Pooling
Panel Consensus
Attempts to pool the available information from more than one source
Panel Consensus
Members of the group are asked to submit their separate forecasts with the forecasts being pooled and results again evaluated
The Jury Technique
Consultation with experts on the country contemplated will always be a cornerstone in sales forecasting where new entry is concerned
Expert Pooling
Consists of a series of “rounds” of numerical forecasts from a preselected number of experts
Delphi Method
The primary requirements for statistical extrapolation of foreign sales are
That data are available
That past events will continue into the future
data observed over some periods in the past is extended into the future
Time Series Extrapolation
Model designed to answer the question:
When will customers adopt a new product or technology?
The Bass Diffusion Model
Required prior knowledge to develop a_________forecast
regression
First, the relevant ___________ of interest needs to be determined – e.g. sales per customer or total sales?
for regression forecast
dependent variable
Second, the forecaster must try to identify _________________ the dependent variable selected

for regession forecast
what factors will affect
Regression-Based Forecasts can usefully be divided up
(5)
The Size Component
Willingness to Buy
Ability to Buy
Sales per Customer
Market Sales
How likely is it that people are going to be able to pay
Ability to Buy
Multiplying the willingness and ability to buy one can develop an estimate of the amount of probable sales per customer in the target segment
Sales per Customer
How many people in the target market
The Size Component
The number of customers times the sales per customer gives the total. forecasted sales
Market Sales
How likely is it that people are willing to buy the product
Willingness to Buy
Drawing on informal in-house knowledge and on selected contacts in the market country, a list of competitors is compiled
Identifying Competitors
forecasting market share