Week 1 Disc

Respond to the following in a minimum of 175 words: 

take a look at the country risk outline below.

How might you apply this to your course project as well as to an actual market research scenario?

Response here:

Analyzing Country Risk

Below is a marketing research tool called a Country Risk Outline. Once a firm has identified the key risk factors that drive market decisions for them, they can tailor such an outline.

Each firm's outline would turn out different than the one below, because they would have a different array of risk factors and would categorize the risks differently. The one below is, therefore, merely a sample.

The risk outline, once created, is used to compare different country markets, with the intent of comparing each market based on the same risk criteria. The ultimate goal is to identify those foreign markets that offer the greatest opportunity with the least risk, so the firm can do further research as it seeks to penetrate these chosen markets.

COUNTRY RISK OUTLINE

I. INVESTMENT RISK:

1. Profitability of investment in target country

2. New foreign investment in target country

3. Nationalization risk

4. Special government incentives and assistance

5. Government investment laws

6. Export incentives

7. Taxation laws, schedules and rates

II. MARKET SCREENING AND ANALYSIS:

1. Market demand (market size, intensity and growth)

2. Trade and investment statistics

3. Market profile (disposable income, per capita GNP, etc.)

4. Potential market risks

III. DISTRIBUTOR/AGENT RISK (if this is the chose mode of entry):

1. Government laws (especially termination rules)

2. Harmony with distributor's other product lines

3. Track record, service ability, finances & training

4. Other distributor/agent risks

IV. COMPETITON:

1. Their approach: direct or indirect

2. Market share

3. Statistics on their major accounts

V. LABOR:

1. Comparative wage and productivity levels

2. Crucial labor laws and trends

3. Availability of qualified trainees

4. Unions and work stoppages

5. Fringe benefits

6. Dismissal laws

7. Limitations on foreign workers

VI. FOREIGN EXCHANGE & MONETARY RISKS:

1. Are funds freely remittable?

2. Exchange controls (present or pending)

3. Exchange rate trends (U.S. dollar to the foreign currency)

4. Inflation trends and taxation adjustments

5. Interest rates

6. Credit availability

VII. GENERAL POLITICAL & COMMERICAL RISKS:

1. Political risks

2. Balance of payments & debt service

3. Foreign trade trends & economic growth

4. Deficiencies in infrastructure

5. International memberships, tariffs, non-tariff barriers

VIII. TENTATIVE CONCLUSIONS & RECOMMENDATIONS:

IX. MARKET TESTING AND FINAL COUNTRY SELECTION:

1. Visit the foreign country

2. Attend trade fairs or missions

3. Retain local consultants to research the market

4. Identify cultural problems or technical difficulties

5. Make the final recommendation/selection

References

Cateora, Philip R., Graham, John L., International Marketing (1999). New York:

Irwin/McGraw-Hill.

Coface. (2003). Retrieved July 7, 2010 from

safely.com/sitecwp/ceen.nsf/vwRC?Openview&count=1000" http://www.trading-

safely.com/sitecwp/ceen.nsf/vwRC?Openview&count=1000

Economist Intelligence Unit. (2003). Retrieved from http://store.eiu.com/

Hollensen, S. (2007). Global marketing. (4th ed.). London: Prentice Hall.

International Country Risk Guide. Retrieved July 8, 2010 from

http://www.icrgonline.com/