SCREENING PROCESS FOR POTENTIAL MARKETS AND SITES

SCREENING PROCESS FOR POTENTIAL MARKETS AND

SITES

Identify Basic Appeal

Determining Basic Demand

Assess if there is a basic demand for the company's product in the

potential market

Consider factors like climate that may affect demand

Remove markets where the product is unsuitable or banned

Determining Availability of Resources

Assess availability of key resources needed for business activities

like:

Raw materials

Labor

Financing

Infrastructure

Markets lacking required resources are removed

Assess the National Business Environment

Cultural Forces

Assess how local culture may affect product salability and marketing

Consider if workforce has needed skills for business activities

planned

Political and Legal Forces

Attitudes toward trade, investment reflected in restrictions on

imports, exports, investment

Can force foreign companies into minority positions

Can bar entry into key domestic industries

Political stability important - unforeseen changes increase risk

Lean, efficient bureaucracy makes market/site more appealing

Economic and Financial Forces

Fiscal, monetary policies affect confidence of investors, companies

Currency volatility makes earnings predictions difficult

Cost of logistics essential in determining potential profitability

Measure Market or Site Potential

Measuring Market Potential

Use market research reports to estimate market size, competitors,

distribution, trends

Determine0income elasticity: sensitivity of demand to income

changes

Helps forecast growth or contraction

For limited info, create0market potential index0with metrics like:

Market size

Market intensity (spending power)

Select the Market or Site

Make final selection based on assessment of all factors

May require visits to most promising locations

Conduct in-depth feasibility analysis on top choices