Country Evaluation and Selection

1. IAF 605 - International Business Management
Country Evaluation and Selection
Week 9

2. Agenda
Review Chapter 11
Chapter 12 – Country Evaluation and Selection
Burger King Beefs Up Global Operations

3. Review

4. Chapter Objectives
To grasp company strategies for sequencing the penetration of countries
To see how scanning techniques can help managers both limit geographic alternatives and
consider otherwise overlooked areas
To discern the major opportunity and risk variables a company should consider when
deciding whether and where to expand abroad
To know the methods and problems when collecting and comparing information
internationally
To understand some simplifying tools for helping to decide where to operate
To consider how companies allocate emphasis among the countries where they operate
To comprehend why location decisions do not necessarily compare different countries’
possibilities

5. Location, location, location
Companies lack resources to take advantage of
all international opportunities.
Companies need to:
Determine the
order of country
In choosing geographic sites, a
entry. company must decide:
Set the rates of
resource Where to sell. Where to produce.
allocation among
countries.

6. Location Decisions Affecting International Operations
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

7. Figure 12.3: The Location-Decision Process

8. Scanning
aids managers in considering alternatives that might otherwise be
overlooked
helps limit the final detailed feasibility studies to a manageable
number of those that appear most promising
Source: kltprc.net

9. Escalation of Commitment
Source: jnrphotography.com

10. Scanning for Opportunities
Sales expansion - Economic and Demographic Variables
Source: zastavki.com

11. Scanning for Opportunities
Resource acquisition - Cost Considerations
Source: newsdesk.si.edu

12. Factors to Consider in Analyzing Risk
political
competitive
natural
monetary
disaster*
perceptions of risk | opportunity | how to reduce | trade-offs
* See the Disaster Risk Index: http://www.nat-hazards-earth-syst-sci.net/9/1149/2009/nhess-9-1149-2009.html

13. Collecting and Analyzing Data
value
(revenue
gains or cost
Problems
savings) with
research
results and
data?
costs of
information

14. Some Problems with Research Results and Data
Inaccurate Info Noncomparable Info
• The amount, accuracy, and • Managers should be
timeliness of published data particularly aware of
vary substantially among different definitions of
countries terms, different collection
methods, and different base
years for reports, as well as
misleading responses
Image sources: http://aznmusic.files.wordpress.com/2008/01/chinglish.jpg; http://www.flickr.com/photos/thebusybrain/249294562 5/

15. External Sources of Information
Individualized Reports
Specialized Studies
Service Companies
Government Agencies
International Organizations
and Agencies
Trade Associations

16. Reminder
July 27th
group
assignment
due

17. Country Comparison Tools – Grids and Matrices

18. Allocating Among Locations
Reduce the risk of liability of foreignness by moving first to countries more similar to their
home countries.
Contract with experienced companies to handle operations for them, limit the resources they
commit to foreign operations, and delay entry to many countries until they are operating
successfully in one or a few.

19. The Usual Pattern of Internationalization – Gradual Commitments

20. Geographic Diversification versus Concentration
Strategies for ultimately reaching a high level of commitment in
many countries are:
• Diversification—go to many fast and then build up slowly in each.
• Concentration—go to one or a few and build up fast before going to others.
• A hybrid of the two.

21. To Diversify or to Concentrate: The Role of Product and Market Factors
(p461)

22. Reinvestment Versus Harvesting (Divesting)
A company may have to
make new commitments
to maintain
competitiveness abroad.
Companies must decide
how to get out of
operations if:
They no longer fit the overall
strategy.
There are better alternative
opportunities.

23. Noncomparative Decision Making - one proposal at a time
Companies may need to:
Proposal • react quickly to
Proposal A proposals
B
• respond to competitive
threats
Proposal
C • because multiple
feasibility studies seldom
are finished
simultaneously
Unanticipated Prospects

24. Burger King Beefs Up Global Operations (p465-470)
1. By mid-2009, Burger King was not in any of the following five countries: France, India, Nigeria,
Pakistan, and South Africa. Compare these countries as possible future locations for Burger King.
2. When entering another country, discuss the advantages and disadvantages that an
international restaurant company, specifically Burger King, would have in comparison with a local
company in that market.
3. About two-thirds of Burger King’s restaurants and revenues are in its Americas region (United
States and Canada) and one-third elsewhere. Should this relationship change? If so, why and
how?
4. The case mentions that Burger King prefers to enter countries with large numbers of youth and
shopping centers. Why do you think these conditions would be advantageous?
5. How has Burger King’s headquarters location influenced its international expansion? Has this
location strengthened or weakened its global competitive position?
6. Evaluate Burger King’s strategy of using the Brazilian experience to guide its entries into Russia.

25. Homework
review Chapter 12
do quiz (Blackboard)
read Chapter 13 – Export/Import
strategies
read/be prepared to discuss p499-
500
A Dirty Dilemma: Exporting
Hazardous Waste