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The first category of approaches focuses on whether to enter overseas markets on an incremental basis or whther to enter a number of overseas markets simultaneously and on the basis of experience decide which markets to concentrate on.
The purpose of screening is to enable the firm to arrive at a portfolio of attractive overseas markets.
AUSTRADE (Australian Trade Commission ) developed two grids that compares attractiveness of the overseas market with the competitiveness of Australian firm in order to decide the merits of entering the specific market.
Time consuming and beyond the resources of many SMEs.
Alternative could be to consider all markets in the World and then screening markets in relation to a succession of criteria. Unsuitable markets are eliminated leaving a small cluster of markets that offer the greatest potential.
Question1: Which overseas markets are of no interest to the firm regardless of their apparent potential?
Does influence market selection. It is often due to the prejudice of the senior executives. For example, an unhappy holiday experience in India may result in a refusal by the CEO to contemplate exporting to that country.
Only 30% of world markets remain. Now more expensive and time consuming elements of evaluation are applied to remaining countries.
Question 5: Which remaining overseas markets have substantial entry barriers to products from your country to protect domestic industry or to confirm to trade relations arrangements with other countries
Question 6: Which remaining overseas markets should be avoided because competitors (bothe domestic and foreign ) are already entrenched in them?
End of this stage will see dropping of another 10% markets from the list.
Likely that less than 10% markets remain for consideration
Question 11: Which remaining overseas markets are no longer attractive because of the extent to which resources need to be committed and changes made to existing company resources?
Question 12: Do any of the markets still under consideration fail to meet the company’s objectives or match its competitive advantages?
With the several remaining markets having promise, no final decision should be made until these markets have been visited by a responsible executive to see whether the impressions of potential are justified. It is only then that they should be ranked in order of attractiveness.