Market Assessment  and Analysis
Heineken Brews Up Global Strategy <ul><li>Within a few years of its founding, in 1864, Heineken was exporting beer to Fran...
Heineken Brews Up Global Strategy (cont.) <ul><li>Heineken has refused to establish a brewery in the United States. Why? <...
Foreign Market Analysis <ul><li>To successfully increase market share, revenue, and profits, firms must normally follow th...
Selection of Foreign Markets Initial Screening Basic Needs Potential/Foreign Trade  Investment Second Screening Economic a...
Initial Screening <ul><li>Basic Need Potential </li></ul><ul><ul><li>Identify locales where product or service is needed <...
Assessing Alternative Foreign Markets <ul><li>Market potential </li></ul><ul><ul><li>The first step in foreign market sele...
Second Screening-- Financial and Economic Forces <ul><li>Inflation Rate </li></ul><ul><li>Exchange Rate </li></ul><ul><li>...
Second Screening-- Financial and Economic Forces <ul><li>Market indicators </li></ul><ul><ul><li>Measures of relative mark...
Second Screening-- Financial and Economic Forces <ul><li>Trend Analysis </li></ul><ul><li>Cluster Analysis </li></ul><ul><...
Third Screening-- Political/Legal Forces <ul><li>Market entry barriers </li></ul><ul><li>Profit repatriation barriers </li...
Assessing Alternative Foreign Markets (cont.) <ul><li>Legal and political environment </li></ul><ul><ul><li>A firm may cho...
Fourth Screening-- Sociocultural Factors <ul><li>Language </li></ul><ul><ul><li>Regional Dialects </li></ul></ul><ul><li>E...
Fifth Screening-- Competitive Forces <ul><li>Size and strength of competitors </li></ul><ul><li>Competitors’ promotion met...
Evaluating Costs, Benefits, and Risks <ul><li>Costs </li></ul><ul><ul><li>Two types of costs are relevant at this point: d...
Evaluating Costs, Benefits, and Risks (cont.) <ul><li>Risks </li></ul><ul><ul><li>Generally, a firm entering a new market ...
Final Selection <ul><li>Field Trip </li></ul><ul><li>Research local markets </li></ul><ul><ul><li>Secondary data (UN IMF, ...
Upcoming SlideShare
Loading in …5
×

Market assessment analysis @ mbabecdoms

743 views

Published on

Market assessment analysis @ mbabecdomsMarket assessment analysis @ mbabecdoms

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
743
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
15
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Market assessment analysis @ mbabecdoms

  1. 1. Market Assessment and Analysis
  2. 2. Heineken Brews Up Global Strategy <ul><li>Within a few years of its founding, in 1864, Heineken was exporting beer to France, Italy, Spain, Germany, and the Far East. In 1914 Heineken’s managers decided to export beer to the United States, and contracted with Van Munching & Company to distribute its products in North America. </li></ul><ul><li>After World War II, Alfred Heineken came to New York to study marketing and advertising with Van Munching, and returned to the Netherlands in 1948 with knowledge to help launch Heineken into other foreign markets worldwide. </li></ul>
  3. 3. Heineken Brews Up Global Strategy (cont.) <ul><li>Heineken has refused to establish a brewery in the United States. Why? </li></ul><ul><li>Heineken learned from the experience of other breweries. Lowenbrau had begun to brew in the U.S. and sales began to drop. The beer was no longer an import and lost its cachet as an authentic Bavarian beer. Heineken continues to ship its beer into the U.S. market even though it might be cheaper to produce it there. </li></ul><ul><li>Heineken recently bought Van Munching & Company, and now owns its U.S. distribution arm outright. </li></ul>
  4. 4. Foreign Market Analysis <ul><li>To successfully increase market share, revenue, and profits, firms must normally follow three steps: </li></ul><ul><ul><li>Assess alternative markets </li></ul></ul><ul><ul><li>Evaluate the respective costs, benefits, and risks of entering each </li></ul></ul><ul><ul><li>Select those that hold the most potential for entry or expansion </li></ul></ul>
  5. 5. Selection of Foreign Markets Initial Screening Basic Needs Potential/Foreign Trade Investment Second Screening Economic and Financial Forces Third Screening Political and Legal Forces Fourth Screening Sociocultural Forces Fifth Screening Competitive Forces Final Selection Personal Visit
  6. 6. Initial Screening <ul><li>Basic Need Potential </li></ul><ul><ul><li>Identify locales where product or service is needed </li></ul></ul><ul><li>Foreign Trade and Investment </li></ul><ul><ul><li>Assess similar products already in market </li></ul></ul><ul><ul><li>International Trade Statistics Yearbook (U.N.) </li></ul></ul><ul><ul><ul><li>Limitations of Import data </li></ul></ul></ul><ul><ul><ul><ul><li>Foreign Exchange indexing </li></ul></ul></ul></ul><ul><ul><ul><ul><li>changing restrictions of liberties </li></ul></ul></ul></ul><ul><ul><ul><ul><li>import situation may change </li></ul></ul></ul></ul><ul><ul><ul><ul><li>political change </li></ul></ul></ul></ul>
  7. 7. Assessing Alternative Foreign Markets <ul><li>Market potential </li></ul><ul><ul><li>The first step in foreign market selection is assessing market potential. Many publications provide data about population, GDP, per capita GDP, public infrastructure, and ownership of such goods as cars and televisions. Such data permit firms to conduct a preliminary screening of foreign markets. </li></ul></ul><ul><li>Levels of competition </li></ul><ul><ul><li>To assess the competitive environment, a firm should identify the number and sizes of firms already competing in the target market, their relative market shares, their pricing and distribution strategies, and their relative strengths and weaknesses, both individually and collectively. </li></ul></ul>
  8. 8. Second Screening-- Financial and Economic Forces <ul><li>Inflation Rate </li></ul><ul><li>Exchange Rate </li></ul><ul><li>Interest Rates (Nominal and Real) </li></ul><ul><li>Credit Availability </li></ul><ul><li>Volatility of all </li></ul>
  9. 9. Second Screening-- Financial and Economic Forces <ul><li>Market indicators </li></ul><ul><ul><li>Measures of relative market strength </li></ul></ul><ul><li>Market factors </li></ul><ul><ul><li>Estimates demand for specific products </li></ul></ul>
  10. 10. Second Screening-- Financial and Economic Forces <ul><li>Trend Analysis </li></ul><ul><li>Cluster Analysis </li></ul><ul><li>All analysis should be updated regularly </li></ul>
  11. 11. Third Screening-- Political/Legal Forces <ul><li>Market entry barriers </li></ul><ul><li>Profit repatriation barriers </li></ul><ul><li>Political instability </li></ul><ul><li>Taxes </li></ul><ul><li>Standards </li></ul><ul><li>Price controls </li></ul>
  12. 12. Assessing Alternative Foreign Markets (cont.) <ul><li>Legal and political environment </li></ul><ul><ul><li>A firm may choose to forego exporting its goods to a country that has high tariffs and other trade restrictions in favor of exporting to one that has fewer or less significant barriers. Conversely, trade policies and/or trade barriers may induce a firm to enter a market via FDI. </li></ul></ul><ul><li>Sociocultural influences </li></ul><ul><ul><li>Managers assessing foreign markets must also consider sociocultural influences, which, because of their subjective nature, are often difficult to quantify. To reduce the uncertainty associated with these factors, firms often focus their initial internationalization efforts in countries culturally similar to their home markets. </li></ul></ul>
  13. 13. Fourth Screening-- Sociocultural Factors <ul><li>Language </li></ul><ul><ul><li>Regional Dialects </li></ul></ul><ul><li>Education </li></ul><ul><li>Religious Attitudes </li></ul><ul><ul><li>Holidays </li></ul></ul><ul><li>Social Values </li></ul>
  14. 14. Fifth Screening-- Competitive Forces <ul><li>Size and strength of competitors </li></ul><ul><li>Competitors’ promotion methods </li></ul><ul><li>Competitors’ product mixes </li></ul><ul><li>Prices </li></ul><ul><li>Distribution channels employed </li></ul><ul><li>Market share distribution </li></ul><ul><li>Market coverage </li></ul>
  15. 15. Evaluating Costs, Benefits, and Risks <ul><li>Costs </li></ul><ul><ul><li>Two types of costs are relevant at this point: direct and opportunity. Direct costs are those the firm incurs in entering a new foreign market and include costs associated with setting up a business operation. Opportunity costs are those that result from entering one market as opposed to another—a firm forfeits or delays its opportunity to earn profits in one market by dedicating its resources to another. </li></ul></ul><ul><li>Benefits </li></ul><ul><ul><li>Among the most obvious potential benefits are the expected sales and profits from the market. Others include lower acquisition and manufacturing costs, foreclosing of markets to competitors, competitive advantage, access to new technology, and the opportunity to achieve synergy with other operations. </li></ul></ul>
  16. 16. Evaluating Costs, Benefits, and Risks (cont.) <ul><li>Risks </li></ul><ul><ul><li>Generally, a firm entering a new market incurs the risks of exchange rate fluctuations, additional operating complexity, and direct financial losses due to inaccurate assessment of market potential. </li></ul></ul>
  17. 17. Final Selection <ul><li>Field Trip </li></ul><ul><li>Research local markets </li></ul><ul><ul><li>Secondary data (UN IMF, WTO, et al) </li></ul></ul><ul><ul><li>Primary data </li></ul></ul><ul><ul><ul><li>Cultural problems </li></ul></ul></ul><ul><ul><ul><li>Technical problems </li></ul></ul></ul><ul><li>Research as a Reality </li></ul><ul><ul><li>Highly developed in Developed Countries </li></ul></ul><ul><ul><li>Less Developed Countries simpler and less of it </li></ul></ul>

×