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Chapter 5 Analyses of National Markets. John S. Hill. Figure 5-1: National Markets Analysis topic outline. Analysis of National Markets. The Shaping of National Cultures Historic Factors Geographic Factors. Macro Analysis Political Factors Economic Factors International Position.

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figure 5 1 national markets analysis topic outline
Figure 5-1: National Markets Analysis topic outline

Analysis of National Markets

  • The Shaping of National Cultures
  • Historic Factors
  • Geographic Factors
  • Macro Analysis
  • Political Factors
  • Economic Factors
  • International Position

Business & Market Analysis

Operating Conditions

Industry Analysis

Product-Market Fit

chapter outline
Chapter Outline
  • Essential Background
  • Current Position Analysis
  • Commercial Analysis
  • Cultural Analysis
essential background
Essential Background
  • Historic Influences on National Culture Development
  • Geographic Influences on National Culture Development
essential background1
Essential Background
  • Historic Influences on National Culture Development
  • Political trends, power bases and sensitivities: powerful families; key leaders
  • Industrialization, Economic Change and Development: agriculture-industrial-service sector breakdowns as key indicators
  • Cultural development, Ethnic, cultural and linguistic differences: size of groups and extent of rivalries
  • External influences on country behaviors
essential background2
Essential Background
  • External Influences on Country Behaviors
  • National participation and membership of global treaties and conventions: UN, IMF, WTO, World Bank, IMO, ICAO and so on
  • Participation in Regional Political Organizations: Organization of American States (OAS), Organization of African Unity (OAU).
  • Historic Events and National Rivalries: China and Taiwan; North versus Southern Ireland
essential background3
Essential Background
  • Geographic Influences
  • Geographic Influences on National Development
  • Country location on world map: affects political, trade, commercial relationships
  • Climate: affects population concentrations, food supplies, work conditions, national mindsets (e.g. fatalism in developing nations)
  • Population concentrations: affects market demand and marketing approaches (e.g. ethnic groups)
  • Resources: agricultural food supplies, energy sources, mineral supplies
  • Topography: affects population, distribution
essential background4
Essential Background
  • Geographic Influences
  • Geographic Influences on Infrastructure Development: necessary in foreign, especially developing markets
  • Utility and Energy Assessments: water, sewer, energy availabilities
  • Communication infrastructures: telephones, radio, TV, print media availabilities
  • Transportation infrastructures: extent of development of highways, waterways, rail, port, harbor and airport facilities
current position analysis
Current Position Analysis
  • Current Political Situation
  • Current Economic Position
  • Current International Position
  • How Managers use Balance of Payments Data
current position analysis1
Current Position Analysis
  • Current Political Situation
  • Political system: democracy v.s. authoritarian systems: extent of democracy (1 party democracies)
  • Parliamentary Assemblies: who has power; frequency of elections
  • Key political parties: and philosophies (right, left wing, special interests)
  • Political risk, elections, and the likelihood of political change
current position analysis2
Current Position Analysis
  • Political Risk, Elections and the Likelihood of Political Change
  • Internal frictions: ethnic or religious groups and their influence on national politics
  • External influences: impact of globalization, westernization, privatization
  • Economic problems: inflation, unemployment, growth, trade (e.g. protectionism)
  • Political problems: government expenditure priorities; taxation levels, social welfare, corruption, business legislation
current position analysis3
Current Position Analysis
  • Current Economic Position
  • Comparative economic analyses: country versus regional performance puts national economic performance into perspective
  • Country-specific economic analyses
  • General economic indicators: GDP size, GDP per capita; government income/expenditures; growth, inflation
  • Private-sector performance: public/private expenditures; agriculture-industry-services; key industries and sectors
  • International economic and trade policies: tariff levels, WTO, trade bloc membership
current position analysis4
Current Position Analysis
  • Current International Position
  • Analyzing Country Balance of Payments
  • Current Account: merchandise trade balance, goods and services balance, income account, unrequited (one-time) transfers
  • Capital Account: capital account, direct investments, portfolio investments, monetary transactions
  • Financial Account=direct investments + portfolio investments + financial derivatives + other investments
  • Net Errors and Omissions
  • Reserves and related items show how B/P surpluses are used or how deficits are financed
current position analysis5
Current Position Analysis
  • How Managers use Balance of Payments Data
  • Merchandise trade balance: Imports and exports: protectionist tendencies, currency adjustments
  • Services: laws requiring local carriers
  • Investments: restrictions for ‘capital flight’
  • Balance of payments effects on currency values: B/P surpluses (currency strengthening); B/P deficits (currency weakening)
  • Inflation rate effects on balance of payments and currency values: high inflation = likely currency devaluations
commercial analysis
Commercial Analysis
  • Industry analysis
  • Demand Analysis
  • Supply Chain Analysis
  • Business Environment Analyses
commercial analysis1
Commercial Analysis
  • Industry analysis
  • Market size, growth
  • Market structure: # firms; global, regional, national competitors; profitability; change; key success factors; industry characteristics
  • Demand Analysis: Customer and Marketing Considerations
  • Customer concentrations: where located
  • Customer segmentation issues: profiles, location
  • Marketing research services: availability
commercial analysis2
Commercial Analysis
  • Supply Chain Analyses
  • Supplier considerations; location, quality
  • Manufacturing Investment and Site-Location Decisions
    • Investment permissions: fit with government plans
    • Investment incentives: for undeveloped regions
    • Infrastructure connections: roads, energy
    • Labor quality and availability: education system
    • Labor laws: wages, work hours, safety, benefits
    • Information technology/E-commerce issues
    • Cost chain considerations: wage rates, depreciation rates, taxes
commercial analysis3
Commercial Analysis
  • Business Environment Analyses
  • Financial Aspects: Capital Markets, Taxation Policies, and Currency Issues
    • National capital markets: long, medium, short term capital sources (stock markets, banks)
    • Corporate taxation and taxes: rates, exemptions
    • Currency considerations: convertibility; stability; preferences for depreciating currencies for exports and investments
  • Legal Infrastructures
commercial analysis4
Commercial Analysis
  • Business Environment Analyses
  • Legal Infrastructures
    • Industry ownership limitations: ‘off limits’ sectors; ownership restrictions
    • Monopoly and anti-trust laws: affects acquisitions
    • Intellectual property laws: procedures, effectiveness, enforcement
    • Consumer protection laws: warranties, advertising, deceptive practices
    • Environmental laws: recycling, pollution, chemical use
    • Local company organization: affects shareholder/owner responsibilities, liabilities, obligations
cultural analysis
Cultural Analysis
  • General national backgrounds: climate, history, government, education, population, religion, language
  • Interpersonal relations: family unit, dating, appearance, visiting, greetings, eating habits, tipping, gender relations, body language, gestures
  • Lifestyles: eating habits, recreational sports, diet, refreshments (alcohol)
  • General attitudes: family, friends, punctuality, modesty, religiosity, surprises, materialism, social classes, ethnic identities, male-female relations
key points
Key Points
  • Thorough examinations of national markets entail…
    • Reviewing background info on country history and geography
    • Assessing the current political, economic, and international situations
    • Evaluating its commercial environment and national culture
key points1
Key Points
  • Historic background traces national political development and economic change.
  • Geographic factors affect national economic and infrastructure development.
  • Managers examine the current political, economic, and international situations.
key points2
Key Points
  • National economic positions should be assessed in their regional context first, followed by examinations of economic indicators, private sectors, and memberships of international organizations.
  • Analyses of country balances of payments show how nations are performing in international trade.
key points3
Key Points
  • Commercial analyses comprise examinations of national industry conditions.
  • Business environment analyses review general factors affecting operations in foreign markets.
  • Cultural analyses look at national backgrounds and behaviors.