3 Assessing Foreign Markets Free Online FlashCards

Why assess purchasing power by customer segment?

Estimate purchasing power for the specific customer segment; national averages can hide major differences between groups, such as urban and rural households.

Which conditions determine whether a business can serve customers reliably?

Transport, ports, electricity, communications, payment systems, and skilled labor affect operating costs and service quality.

How can trade costs affect a product in a foreign market?

Tariffs, customs procedures, and trade-agreement preferences can alter a product’s final price and competitive position.

How should a business assess political risk?

Assess both the likelihood of disruption and the business’s exposure to it, such as dependence on one country for a facility, supplier, or major revenue source.

What do the Worldwide Governance Indicators compare?

They compare perceptions of governance, including political stability, government effectiveness, regulatory quality, rule of law, and control of corruption.

What is a key limitation of the Worldwide Governance Indicators?

They support screening and comparison but do not predict a particular company’s outcome or replace country- and sector-specific research.

What should a firm check about legal access to a market?

Check the rules for the intended activity, including foreign ownership limits, screening, local-partner requirements, licenses, and product approvals.

What does the OECD FDI Regulatory Restrictiveness Index measure?

It compares formal restrictions such as foreign-equity limits, investment screening, restrictions on key foreign personnel, and other operating restrictions.

What does the OECD FDI restrictiveness measure leave out?

It measures formal barriers, not every practical difficulty a company may encounter when operating in a market.

How can the World Justice Project Rule of Law Index help a business?

It compares aspects of rule-of-law practice, including regulatory enforcement and civil justice, and can help identify questions for local due diligence.

Which costs belong in an estimate of market entry and operation?

Include tariffs, shipping, distribution, taxes, compliance, staffing, and any necessary local investment.

How can a weighted scorecard support market comparison?

Use a consistent set of criteria, weight factors by business strategy, and document the evidence and uncertainty behind each rating.