4.2.2 Assessment Of A Country As A Market

Question 1

What factors make a foreign market attractive

Answer 1

-disposable incomes of consumers
- the ‘ease’ of doing business
- political stability
- available infrastructure
- exchange rates

Question 2

How does disposable income make a foreign market more attractive

Answer 2

• if a market has a growing economy and average incomes are rising, this may provide a gap in the market for foreign firms to penetrate

Question 3

How does ease of doing business make a foreign market attractive

Answer 3

• laws and restriction may make doing business difficult
• language or culture may act as a barrier
• therefore it is easier to trade in countries that speak the same language or have similar cultures

Question 4

How does availability of infrastructure determine a foreign markets attractiveness?

Answer 4

• does the society work efficiently, that will be reliable?
• availability of technology

Question 5

How do exchange rates influence the attractiveness of a foreign market

Answer 5

• if the exchange rates are unstable it could be problematic

Question 6

How does political stability influence a foreign markets attractiveness

Answer 6

• instability creates risk and uncertainty
• changes to tariffs, employment can have a knock on effect on the business