2.2 Target Market Strategies

Question 1

The three levels

Answer 1

1. Market presence strategy ( - Which regions and what markets?
2. Market selection strategy: Which specific market? Attractiveness, Risks, entry barriers?
3. Market segment strategy
   - Intranational
   - Integral

Question 2

Market presence strategies

Answer 2

1. Fundamental
   - Concentration (few markets)
   - Diversification (many markets)
2. Geographical (single VS multi market, world market)
   centrarad och sen expandera kring den marknaden eller few strong
3. Attractiveness-oriented (focus, presence, opportunity)
4. Balance: (risk, investment, know-how, competition)

Question 3

Market presence - Concentration Strategy

Answer 3

• Sequential entry in few stricly selected foreign markets

- resources in limited number of markets

Question 4

Market presence - Diversification Strategy

Answer 4

• Entry in many national markets
• Within short period of time
• Resources allocated over many national markets (risk diversification)

Question 5

Criteria for market selection

Answer 5

1. Attractiveness: market volume, growth, structure, price level, cost etc -> market potential
2. Market Risk: change rate, payment, inflation, security -> market potential risks
3. Competition: (Porter) entry barriers, intensity of rivalty, bargaining power of customers and suppliers
   - > competition and entry barriers firms must overcome

Market attractiveness -> Assosiated with high risk
How easy to benefit from attractiveness?

Question 6

Market selection methods

Answer 6

1. Checklist approach
2. Scoring models
3. Portfolio Analyis
4. Sequential evaluation process

Question 7

Market selection methods - Checklist approach

Answer 7

• Formulation of conditions relevant for decision making
• Eliminate irrelevant countries
• Global method
• Subjective!

Often simplifies the reality(complex). Hard to find data for other methods.
Quantitative (numbers) are easy to compare but harder with ex risks or individual specific

Question 8

Market selection methods - Scoring methods

Answer 8

• Evaluation based on weighted evaluation criterias
• BERI index method (Business Environmental Risk Index)

Two risk operation index
1. ORI - Operations risk index
Weighted criterias ex political stability. Then the countries are rated. Mulitply the rate with the weight and sum for all criterias. 100-71 stabel country
OBS: Subjective selection criteria, not independent, weighted factors

2. PRI - Politial risk index

Question 9

Market selection methods - Portfolio analysis

Answer 9

• Portfolio matrix: Attractiveness /Market risk

Attractive markets can often be mature markets -> cant win that much

Help calculate the risk and attractiveness of different combinations

Question 10

Market selection methods - Sequential evaluation process

Answer 10

1. Ranking of criterias
2. Minimal and maximal value for each citeria
3. exclude countries that does not fit in

3-step

Question 11

Additional influencing factors for market selection

Answer 11

1. Market knowledge: (of decision maker, underestimate)
2. Competitors behavior: Follow customers and competitors, first mover advantages
3. Attitudes of the decision maker: What is important on market - price level, wuality
4. Type of competitive advanges

Question 12

Market segmentation strategies

Answer 12

1. Intre-national :
   - Target groups within selected country markets, can be different between countries
2. Integral market segmentation
   - Target groups across countries
   - Markets segmentation in countries same - global, ec of scale