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Country Evaluation and

selection
International Business

Prepared
By

Manu Melwin Joy


Assistant Professor
Ilahia School of Management Studies

Kerala, India.
Phone 9744551114
Mail manu_melwinjoy@yahoo.com

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Please seek permission to reproduce the same in public forms

Introduction
Because
companies
lack the resources to
take advantage of all
international
opportunities
they
identify,
they
must
determine both the
order of country entry
as well as the rates of
resource
allocation
across countries.

Steps Involved
Choosing marketing and
production
sites
and
geographic strategy.
Scanning for alternative
locations.
Choosing and weighing
variables.
Collecting and analyzing
data.
Country Comparison tool.
Making
final
country
selection.

Choosing marketing and production


sites and geographic strategy
Developing
a
site
location strategy that
helps a firm maximize
its
resources
and
competitive position is
very challenging, given
that many estimates
and assumptions about
factors such as future
costs and prices and
competitors
reactions
must be made.

Scanning for alternative


locations
Scanning
is
useful
insofar as a company
might
otherwise
consider either too few
or too many possibilities.
Through the use of
scanning,
decision
makers can perform a
detailed analysis of a
manageable number of
geographic locations.

Choosing and weighing


variables
To evaluate and compare
countries,
scanning
techniques based on broad
environmental
variables
that
identify
both
opportunities and risks
should be used. Ultimately,
variables must be weighed
against each other to
effectively evaluate the
potential success of a
particular venture and to
compare various ventures.

Choosing and weighing variables


Opportunities
Market Size.
Ease
Compatibility

and
of

Operations.
Costs and Resource
Availability.
Red Tape.

Choosing and weighing variables


Risks
Risk and Uncertainty.
Competitive Risk.
Monetary Risk.
Political Risk.

Collecting and analyzing data


Firms perform research to
reduce uncertainties in
their decision processes,
to expand or narrow the
alternatives they consider
and to assess the merits
of their existing programs.
The
costs
of
data
collection should always
be weighed against the
probable payoffs in terms
of revenue gains or cost
savings.

Country Comparison tool


Two
for

common

tools

analyzing

information collected
via

scanning

are

grids and matrices

Country Comparison tool


Opportunity-Risk
Matrix.
Country
AttractivenessCompany
Matrix.

Strength

Making final country selection


At some point, firms must make
resource allocation decisions. For
new investments they will need to
develop detailed estimates of all
costs and expenses and consider
whether to enter a particular
venture alone or with a partner. For
acquisitions, firms will need to
examine financial statements in
great detail. For expansion within
countries where they are already
operating, country managers will
most likely submit capital budget
requests that include details of
expected returns. To maximize
expected gains, decisions must be
made in a timely fashion.