Global Trade Practics
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Selecting Foreign Markets
Global Trade Practices
Chapter 5
200 plus potential markets
How to choose?
Quick simple models
More detailed “due“due-diligence”
– Initial selection
– Final analysis before investment
Experience
Never “fool“fool-proof”
– Develop “a sense” of the market
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WTP-Chris Schrage
Reasons for Ranking
No company has unlimited resources
Market potential (ROI) important in early
global expansion
Methodology for determining most
effective market expansion
Exercise allows systematic approach to
decision--making
decision
– Eliminates personal preference expansion
– Provides details for successful market entry
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WTP-Chris Schrage
College of Business, University of Northern Iowa
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Global Trade Practics
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Ranking with Analytical Model
Highlights factors for success
Previous markets can be used for
benchmarking
Data research provides base for marketmarketentry plan
Highlights nonnon-industry and product
specific barriers
Can be refined with experienceexperience- possibly
used in sales forecasts
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WTP-Chris Schrage
Selection Process
1) Developing Indicators (Selection Criteria)
a) Product Specific
b) Industry Size
c) Market Growth
2) Convert Data for comparison
3) Determine level of importance (weight)
4) Analyze
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WTP-Chris Schrage
Sample Decision Grid
Ghana
Togo
Benin
Standard
Product
Industry
Competition
Growth
Potential
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WTP-Chris Schrage
College of Business, University of Northern Iowa
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Global Trade Practics
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Country VS. Market Analysis
Country
– Historical/political
borders
– Data collection
– Tariffs
– Customs
– Focused Trade
Agreements
Market
– Trade alliances
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NAFTA
Mercosur
Andean Pact
African Trade Blocks
(9)
– Monetary Unions
•
•
•
Euro
Sefa
Eco
– Metro Areas or
economic zones
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A new model
New business units based on
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Investment
Industry
Information technology
Individual customers
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WTP-Chris Schrage
Challenges indicated by
Ohmae
Most data based on political boundaries
Strategy based on:
– Limited region within a country
– Regional market
market--entry
– Ranking based on overall opportunity vs. individual
countries
– Value chain decisions – borderless view
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Purchasing
Distribution
Marketing
Customer service
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WTP-Chris Schrage
College of Business, University of Northern Iowa
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WTP-Chris Schrage
Regional Slice of Global
Strategy
Pankaj Ghemawat
Harvard Business
Review
– December 19, 2005
Recognition of
differences in local
markets
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Clarification of “regions”
Geographic
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Global
Continental
Sub--continental
Sub
National
Intra--national
Intra
Local
Non Geographic
Dimensions
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Cultural
Administrative
Political
Economic
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WTP-Chris Schrage
College of Business, University of Northern Iowa
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Administrative Regions
Ghana’s Dual System
– Traditional Regions with
Chief
– Political Administration
Togbui Fita
Village of Kopeyia – Aflao Traditional Region
– Volta Political Region
Chief’s Council
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WTP-Chris Schrage
College of Business, University of Northern Iowa
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