Assessing a country as a market

• Factors to consider before enetering new countries

  when businesses are considering new markets they have to consider the attractiveness of the market

  this will involve businesses carrying out extensive market research and using models e.g boston matrix
• Factors - infrastructure

  roads, transportation and communication

  needed so country can operate effectively

  good infrastructure improves production process and delivery of goods and services to the customer which reduces costs and increases sales

  developed countries have better quality infrastructure making it easier to do business
• Factors - ease of doing business

  rules and regulations involved in establishing a business in market could be very easy or extremely hard e.g enforcing contracts

  is businesses face challenges this may lead to delay in operations

  and generating sales

  world economic forum (WEF) has established a ranking of countries by the ease of doing business
• Factors - levels of growth and disposable income

  disposable income - is the total income individuals have left after paying taxes and other statutory payments

  selling in country with higher disposable incomes leads to more sales

  businesses should look at trends in incomes levels over time to see if there is potential growth in sales
• Factors - exchange rate

  the price of one currency in terms of another e.g £1=$1.10

  have significant impacts on profits of business and subject to extreme fluctuations so businesses should look at the historical trends of currency on the country

  businesses moving to country with stronger currency than others can import for cheaper
• Factors - political stability

  how stable is the government

  businesses may be at risk of not gaining a return on their investment in a country with political instability

  a country with instability subject to corruption, lack of law enforcement and higher levels of crime

  causes disruption to trading because everyone is put off

  affect on economy: corruption puts of FDI and MNC's - less goods - lower gdp - low employment - lower disposable income - consumers buying less

  stable economy less risky investment for business