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McGraw-Hill/Irwin
International Business, 6/e © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
Unit Two
Managerial Implications
McGraw-Hill/Irwin
International Business, 6/e © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
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Attractiveness
Overall
Attractiveness
Risks
Political Risks: Social Unrest/Anti-Business Trends
Economic Risks: Economic Mismanagement
Legal Risks: Failure to Safeguard Property Rights
Return
McGraw-Hill/Irwin
International Business, 6/e © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
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Low
High Low
Risks
McGraw-Hill/Irwin
International Business, 6/e © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
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McGraw-Hill/Irwin
International Business, 6/e © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
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2. Market opportunities
Market opportunities assessment measures the potential demand in the
country for a firm’s products or services based on:
• Market size
• Growth
• Quality of demand.
3. Industry opportunities
Industry opportunities assessment determines profitability potential of
a company’s presence in a country given the following factors:
• Quality of industry competitive structure (Porter’s five-force
Industry Analysis Framework)
• Resource availability (Porter’s diamond framework)
McGraw-Hill/Irwin
International Business, 6/e © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
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RESOURCES COMPETITION
- Is the country a critical
source of COUNTRY MARKETS + Intensity of rivalry
+ Skilled personnel? AND INDURTRIES + Entry barriers
+ Raw materials? OPPORTUNITIES + Bargaining power of
+ Components? suppliers & customers
+ Labor? - Is the business
+ Technology? + Profitable short-term?
+ Innovation? INCENTIVES + Profitable long-term?
- Quality of infrastructure + Tax
supporting services + Subsidies
- Location
+ Infrastructures
+ Government contracts
McGraw-Hill/Irwin + Does a presence in this country
International Business, 6/e increase competitiveness?
© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
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