CHAPTER 12
BUILDING THE
KNOWLEDGE BASE
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Copyright © 2011 John Wiley & Sons
1. Gain an understanding of the need for
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Learning
Objectives
research
2. Explore the differences between domestic
and international research
3. Learn where to find and how to use
sources of secondary information
4. Gain insight into the gathering of primary
data
5. Examine the need for international
management information systems
6. Examine the role of international
information systems for corporate
decision processes and strategic planning
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International and Domestic Research
Tools and techniques are the same; the difference is in the
environment to which they are applied
New Parameters
Duties
Foreign
Currencies
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International
Documentation
Different
Transportation
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Different
Modes of
Operating
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International and Domestic Research
Tools and techniques are the same; the difference is in the
environment to which they are applied:
New Environmental Factors
Cultural
Differences
Legal
Issues
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Political System
and Level of
Stability
Differences in
Societal
Structure and
Language
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Level of
Technology
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International and Domestic Research
Tools and techniques are the same; the difference is in the
environment to which they are applied:
The Number of Factors
Involved
Broader Definition of
Competition
• Environmental relationships
must be relearned upon entry
to a new market
• Difficulties in coordination
• Comparison of results across
countries
• Learning how to apply new
lessons learned to different
markets
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• Greater variety of
competition
• Labor market may affect
cost and pricing strategy
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International Business Research Ltd.
International Business Research (IBR) was established in 1993 to
provide customers with top quality, international business-to-business
and industrial market and marketing research services. IBR carries out
a wide variety of research assignments for clients. The main issues
researched within the company include:
• Customer attitudes and needs
• Customer satisfaction
• Distribution channels
• Market opportunities
• Marketing communications
• New product and service development
Source: IBR web site: http://www.ibres.com/index.htm
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Recognizing the Need for International
Research
 Research is as important internationally as it is
domestically
 Reasons for reluctance to engage in international
research:




Lack of sensitivity to differences in culture, consumer tastes,
and market demands
Limited appreciation for different environments
Lack of familiarity with national and international data
sources
Firms prefer to build international business activities
gradually, and experience may then be used as a substitute for
research
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Recognizing the Need for International
Research
 Research helps management to:
 Identify, evaluate, and compare potential business
opportunities
 Develop a business plan
 Fine-tune various business activities
 Anticipate events, take action, and prepare for global
changes
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Going International - Exporting
 Foreign market opportunity analysis – Broad-
based research to obtain information about the
general variables of a target market
 Steps for going international:



Begin with cursory analysis of general variables of a country
Gather information on each country for preliminary evaluation
Select markets for in-depth evaluation
 Competitive assessment – Matching corporate
strengths and providing an analysis of the best
potential for specific offerings
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Going International – Importing
and Market Expansion
 Importing




Shift from supplying to sourcing
Find details on foreign supplier
Find out about source country laws and rules
Understand domestic restrictions and legislation
 Market Expansion




Find more detailed information for expansion
Monitor political climate
Evaluate new business partners
Assess new technology
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Conducting Secondary Research
 Secondary data – Information originally
collected to serve another purpose than the one in
which the researcher is currently interested
 Sources of Secondary Data:
Government
International
Organizations
Directories and
Newsletters
Electronic
Information
Services
Trade
Associations
Service
Organizations
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Macro and Micro Information
Macro Information
Micro Information
 Population trends
 Local laws and
 Tariff information
 Export/import data

 Nontariff measures

 Data on government

trade policy
 Agricultural production
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
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regulations
Size of market
Local standards and
specifications
Distribution system
Competitive activity
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Focus on Politics:
Economists Dispute Argentinean
Inflation Numbers
Economists have learned that in an effort to
improve Argentina’s economic reputation,
Argentinean government officials may have
provided false reports on the country’s inflation
rates for the past 50 years. These disputes have
decreased the trustworthiness of government in the
eyes of Argentine citizens, and they may have also
hurt the country’s creditability in terms of
investments.
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Selection, Interpretation, and Analysis
of Secondary Data
 Selection

Evaluate based on quality, currency, and relevance
 Interpretation and Analysis



Once data are obtained, they must be converted into
information
Proxy information – Data used as a substitute for more
desirable data that are unobtainable
Use of creative inferences is often necessary
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Focus on Ethics
To Share, or Not to Share, That is
the Question
Scientific knowledge for infectious disease, water
purification, genetic crop modification, and similar
issues have largely been viewed as information for
the public good that should be shared within the
global community for the betterment of humanity.
However, issues of data ownership, security
concerns, and general lack of consensus have
erected barriers that prohibit the free flow of
scientific information around the world.
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Data Privacy
 The attitude of society toward obtaining and using
both secondary and primary data must be taken into
account
 Data privacy – restricting use of data according to
laws and preferences of the subjects
 Legal restrictions may exist
 Personal privacy, particularly in the context of
business contacts, is a growing concern
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Protecting Data Privacy with IBM Optim
At IBM, safeguarding the data privacy of clients is not just a good
business practice - in many cases, it’s the law.
IBM® Optim™ delivers data transformation capabilities to mask
personal information and make use of technology safer for consumers.
IBM works with clients to ensure that test environments are safe by
applying data masking techniques or transformation algorithms. The
company also offers webinars in areas such as “Essentials of Data
Privacy” and “Strategies for Successful Data Governance”.
Source: IBM Web Site: http://www-01.ibm.com/software/data/data-management/optim-solutions/data-privacy.html
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Conducting Primary Research
 Primary data - Obtained directly for a specific
research purpose
 Requires:

Clear idea of what the population under study should be
and where it is located before deciding on the country or
region to investigate
 Industrial versus Consumer Sources of Data
 The researcher must decide whether research is to be
conducted in the consumer or industrial product area
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Determining the Research Technique
 Is the data objective of subjective?
 Does the research use structured or
unstructured questions?
 Is information collected in the real world or in a
controlled environment?
 Is the research based on collection of historical
facts or information about future developments?
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Evolution of Organizational Structures
Interviews
Focus Groups
Observation
Surveys
Web
Technology
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 Face-to-face research tool to obtain in-
depth information
 Representatives of a target audience
participate in an unstructured discussion
 Subjects’ activity and behavior are
scrutinized
 Questionnaires used to obtain
quantifiable research information
 Web-based research and e-mail-based
surveys
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Focus on Culture:
The Business Tower of Babel
Advertising mistakes typically occur when a
company translates its advertising into foreign
languages. When such mistakes occur in the
research phase however, the results can be
disastrous. Research findings are often used to
determine a firm’s strategy for new product
development. A translation blunder that goes
undiscovered could set a company on the wrong
track entirely.
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The International Information System
 Daily decisions must be made for which there is neither
time nor money for special research
 Information system – The systematic and continuous
gathering, analysis, and reporting of data for decisionmaking purposes
 Export complaint system – Allows customers to contact
the supplier to inquire about products, make suggestions,
or present complaints
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Positive Aspects of Information
Information should be:
Relevant
Flexible
Accurate
Convenient
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Timely
Exhaustive
Consistent
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Environmental Scanning
 Environmental scanning provides continuous
information on political, social, and economic affairs
 Involves obtaining factual input on a wide variety of
demographic, social, and economic characteristics of
foreign countries
 Content analysis – Systematic evaluation of
communication for frequency of expressions
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Delphi Studies
 A research tool using a group of experts to rank
major future developments
 Groups of about 30 well-chosen participants who
assess expertise in an area of concern
 Particularly valuable because it uses mail, fax, or
electronic communication to bridge large distances
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About the Delphi Method
The Delphi Method is an exercise in group communication among a
panel of geographically dispersed experts. The technique allows
experts to deal systematically with a complex problem or task.
Three features of the Delphi procedure:
• Anonymity – Necessary to reduce the influence of any dominant
group members
• Controlled feedback – Rounds of questionnaires are analyzed and
communicated back to participants
• Statistical group response – Used to ensure that every member's
opinion is represented in the final response.
Source: Delphi Study web site: http://www.delphistudy.org/index.html
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Scenario Building
 Development of a series of plausible scenarios from
trends observed
 Formally reviewing assumptions built into existing
business plans and positions
 Joint occurrences – Shifts affecting the business
environment in several locations simultaneously
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