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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
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political risk
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revolution, external aggression
type of political risk |
general instability stage :1
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import restrictions,local content rules, taxes ,export req.
type of political risk |
level 3: operations
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nationalism, contract revocation
type of political risk |
level 2: expropriation
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repatriation restrictions, exchange rates
type of political risk |
level 4: finance
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Climate is most obvious environmental factor affecting people’s behavior
one of the environmental dimensions |
Physical Environment
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Cultural influences are pervasive in most country markets
one of the environmental dimensions |
Sociocultural Environment
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The level of economic development is a major determinant of local buyer behavior
one of the environmental dimensions |
Economic Environment
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The institutional framework within which markets function is designed to enable or prohibit certain business practices
one of the environmental dimensions |
Regulatory Environment
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The local marketer must read competitive signals to judge the competitors’ future actions
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Competitive Signaling
(ways to research a competitor) |
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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
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The first cut is used to identify candidate countries
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Country Identification
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Involves rating the identified countries on macrolevel indicators
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Preliminary screening
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Involves assessing market potential and actual market size and other country related factors
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In-depth screening
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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
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Final selection
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Four stages for evaluating candidates for foreign market entry
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Country Identification
Preliminary screening In-depth screening Final selection |
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A direct measure of market size can be computed from local production, minus exports, plus imports
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market size
in depth screening criteria |
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Growth estimates can be obtained by getting the market size measures for different years and computing the growth rates
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market growth
in depth screening criteria |
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local production - EX + Im
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Market Size
in depth screening criteria |
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Level of competition can be measured by the number of competitors in the market and the relative size distribution of market shares
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Competitive Intensity
in depth screening criteria |
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Tariffs, taxes, duties, and transportation costs can be ascertained from official government publications
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trade barriers
in depth screening criteria |
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Assesses what is likely to be obtained given the probable situation and contemplated strategies
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sales forecast
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The focus is on the derivation of sales forecasts at two levels
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Industry sales and market share
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Forecasted Industry Sales x Forecasted Market Share
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forecast sales
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what is likely to be obtained given the probable situation and contemplated strategies
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sales forecast
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what could potentially be achieved under “ideal” conditions
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Market Potential
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lack of data means forecasting becomes more subjective
is what stage |
early stage
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with data available, quantitative forecasts are feasible
is what stage |
later stage
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Three forecasting techniques used in the early stages of the PLC
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“Build-up” Method
Forecasting by Analogy Judgmental Methods |
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Generally attempt to introduce a certain amount of rigor and reliability into otherwise quite arbitrary guesses
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Judgmental Methods
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Based on the premise that sales of the product in one “lagging” country will show similarities to sales in another “leading” country
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Forecasting by Analogy
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Derived from market sales estimated on the basis of separate estimates from individuals knowledgeable about certain market segments
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Build-up” Method
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Judgmental Forecasting
4 types |
The Jury Technique
Expert Pooling Panel Consensus |
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Attempts to pool the available information from more than one source
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Panel Consensus
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Members of the group are asked to submit their separate forecasts with the forecasts being pooled and results again evaluated
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The Jury Technique
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Consultation with experts on the country contemplated will always be a cornerstone in sales forecasting where new entry is concerned
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Expert Pooling
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Consists of a series of “rounds” of numerical forecasts from a preselected number of experts
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Delphi Method
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The primary requirements for statistical extrapolation of foreign sales are
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That data are available
That past events will continue into the future |
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data observed over some periods in the past is extended into the future
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Time Series Extrapolation
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Model designed to answer the question:
When will customers adopt a new product or technology? |
The Bass Diffusion Model
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Required prior knowledge to develop a_________forecast
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regression
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First, the relevant ___________ of interest needs to be determined – e.g. sales per customer or total sales?
for regression forecast |
dependent variable
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Second, the forecaster must try to identify _________________ the dependent variable selected
for regession forecast |
what factors will affect
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Regression-Based Forecasts can usefully be divided up
(5) |
The Size Component
Willingness to Buy Ability to Buy Sales per Customer Market Sales |
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How likely is it that people are going to be able to pay
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Ability to Buy
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Multiplying the willingness and ability to buy one can develop an estimate of the amount of probable sales per customer in the target segment
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Sales per Customer
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How many people in the target market
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The Size Component
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The number of customers times the sales per customer gives the total. forecasted sales
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Market Sales
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How likely is it that people are willing to buy the product
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Willingness to Buy
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Drawing on informal in-house knowledge and on selected contacts in the market country, a list of competitors is compiled
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Identifying Competitors
forecasting market share |