ppt on ce&s

8/4/2019 PPT ON CE&S

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Prince Asati

Roll No -32


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Firms lack sufficient resources to pursue all

potential (international) opportunities, they must:Determine the order of country entryEstablish the rates of resource allocation across

countries To choose a country which is suitable for the

marketer product .

To reduce chances of failure.

To utilize the resources optimally.

Its a irreversible decision.As each country is different so it is required to study

them separately.

To find out the market for the product .

To find out unexplored opportunities.


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Evaluation

To understand various countries the marketer will usetechniques like PESTEL analysis, SWOT analysis,other factors.

For conducting these analysis he/she has to mine the

data from various sources. Convert this data into information and depict it in apresentable form like-Grid ,Matrices ,tables, chartscan be used as a tool for presenting the information

Financial techniques can also be used to understandthe financial viability.

Selection

At this stage the marketer using the information will selectthe country or countries which he found favourable fromthe options using his criterion of selection.

After churning few from many, the marketer will compare

the selected countries against each other until he zero it toone or few


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` The lack, obsolescence, and/or inaccuracy ofdata regarding many countries make muchresearch difficult and expensive to undertake.

` Reasons for data inaccuracies include: The publication of false or purposely inaccurate

information designed to mislead The publication of conclusions based on too few

observations, non-representative samples, and/orpoorly designed research instruments

` Data comparability problems are rooted in: Definitional differences across countries [e.g., family

categories, literacy levels, accounting rules]

Differences in base years and time periods

D

istortions in foreign currency conversions The presence of black market activities


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Paid sources should be preferred as you canclaim in case of any discrepancy found

Individualized reports from market research andbusiness consulting firms [commissioned for a

fee] Specialized studies from research organizations

regarding countries, regions, industries, issues,etc.

Government agency socioeconomic and otherreports

International organization and agency reports[e.g., the UN, the IMF, the World Bank, and theOECD]

Trade association reports. Information service company reports [fee-based


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` Scanning techniques are based on broad

variables that identify both opportunities andrisks.

` Scanning techniques help to assure that firmsconsider neither too many nor two fewalternative countries.

For the most part, scanning requires informationthat is readily available, inexpensive, and fairly

comparable.


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` Detailed examination generally requires on-sitevisits to collect and analyze specific information

that increasingly contributes to the final locationdecision process.

`A feasibility study should have clear-cut decisionpoints to guide managers in the decision-making

process.


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PESTELAnalysis


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` Environmentalregulations andprotection

` Tax policies

` International traderegulations andrestrictions

` Consumer protection

` Employment laws` Government

organization / attitude

` Competition regulation

` Political Stability

` Economic growth

` Interest rates &monetary policies.

` Government spending` Unemployment policy

` Taxation

` Exchange rates

` Inflation rates` Stage of the business

cycle

` Consumer confidence


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Red tape: Obstructive bureaucracy, i.e.,disincentives related to the clarity of lawsand whether and how they are enforced

` Red tape includes government obstacleswith respect to: beginning and continuing operations. hiring and/or firing workers the use of expatriate personnel producing and marketing goods satisfying local agencies on matters such

as taxes, labor conditions, andenvironmental compliance


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Corruption -the illegal sale of rights bygovernment officials for their personalgain

` Corruption, i.e., the extortion of income or

resources, may include: requirements of illegal payments to win a

contract requirements of illegal payments to

receive government services requirements of illegal payments tooperate in a particular location orindustry

Firms are likel to avoid o eratin


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` Government researchspending

` Industry focus ontechnological effort

` New inventions anddevelopment

` Rate of technologytransfer

` Life cycle and speed oftechnologicalobsolescence

` Energy use and costs

` (Changes in)

Information Technology

` Income distribution

` Demographics,Population growth rates,

Age distribution` Labor / social mobility

` Lifestyle changes

` Work/career and leisureattitudes

` Education` Fashion, hypes

` Health consciousness &welfare, feelings on

safety` Livin conditions


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Factors include

` Ecological and environmental aspects such as

weather, climate, and climate change which may

especially affect industries such as tourism,farming, and insurance.

` Furthermore, growing awareness of the potential

impacts of climate change is affecting how

companies operate and the products they offer,both creating new markets and diminishing or

destroying existing ones.


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` Natural disasters have a huge impact on people

and property every year, often hitting the

poorest nations of the world hardest.

` Companies should take the risk of natural

disasters and their potential impact into account

when choosing locations for doing business.

` Example - Hurricane, volcanic eruption,earthquake, landslide.


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At Industrylevel


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Scanning of Environment is complete only with Industry

Analysis and Competition Analysis-

` General features / basic conditions of the industry

` Industry Environment

` Industry structure

` Industry attractiveness

` Industry performance

` Industry Practices

` Industry trends / the future of the industry


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No. of players

Total market size

Relative share of the players

Nature of competition : Monopoly, oligopoly, Perfectcompetition

Differentiation practiced by various players

Barriers in the industry - Entry Barriers - Mobility Barriers -

Exit Barriers


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Firms are attracted to countries that:` Located nearby` Share a common language` Have market conditions similar to those

in their home countries` Present few market restrictions Increasingly, firms need to be near

customers and suppliers in locationswhere the infrastructure permits theefficient movement of people, materials,and products and trade restrictions are

minimal.


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Labor costs are a particularly importantfactor in production location decisions.However labor is not homogeneous.

Capital intensity may reduce thedifferences in production costs from onelocation to another there may be sectorand/or geographic differences in wagesrates within countries


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` Companies use a variety of financial techniquesto compare potential projects, including

Discounted cash flow

Economic value added

Payback period Net present value

Return on sales

Return on assets employed

Internal rate of return` Given the same expected return, most decision

makers prefer a more certain outcome to a lesscertain one.

Firms may acquire insurance to reduce risk and


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The possibility of suffering harm or loss,or a course involving uncertain danger orhazard

` Returns tend to be higher in countries whereoperating risks are higher.

` Firms may balance operations in low-return,low-risk countries with operations in high-return,high-risk countries.

`

Firms may guard against currency fluctuationsby locating operations in countries whoseexchange rates are not closely correlated.

`Adverse situations may heighten the perceivedneeds for certain products.


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` Operational risk

` Financial risk

` Political risk

` Credit risk

` Interest rate risk

` Credit risk


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` A country fulfilling all criteria's would be selected .

` The marketer will study the selected country

thoroughly .


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` Firms use both qualitative and quantitative

information to determine which markets to serve

and where to locate production.

` Because each firm has unique competitivecapabilities and objectives, the factors affecting

the country selection decision will differ for

each..

` The interdependence of a firms operations may

obscure the real impact of a given operation on

overall corporate activity and profitability.


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