Assessment of a Country as a Market

• what are the five factors businesses should consider when assessing a country as a market?

  • infrastructure
  • ease of doing business
  • levels of growth and disposable income
  • exchange rates
  • political stability
• why is having good infrastrucure an important factor of a country?

  improves production process and deliveries to customers --> reduces costs and increases sales
• what is meant by the ease of doing business?

  • rules and regulation
  • accessing credit, registering properties and enforcing contracts
• what is the consequence of a country not having ease of doing business?

  delays in operations and generation of sales
• what are some of the countires with the greatest ease of doing business?

  • new zealand
  • singapore
  • hong kong
  • denmark
• if a country has higher disposable income, this is likley to lead to more sales
• if a country has lower disposable income, this is likely to lead to slower sales growth
• businesses should look at trends in income levels over time to see if there is potential growth in sales in the future
• why are exchange rates important to the assessment of a country as a market?

  if a business is moving to a country with a stronger currency then they can import raw materials and components for production at a lower price --> exports from this country will be more expensive to customers abroad
• exchange rates can be subject to extreme fluctuations due to external factors, businesses should look at the historical trends to assess this
• why is political stability important to the assessment of a country as a market?

  if a country has political instability then the business may be at risk of not gaining a return on their investment --> this is because the country may be subject to corruption, lack law enforcements or have a higher level of crime --> more likely to have disruption to trading
• if a country has a stable economy then the investment is less risky