4.2.2 - Assessment of a country as a market

Question 1

What factors which can make some countries more attractive than others to SELL IN*

Answer 1

levels and growth of disposable income ease of doing business infrastructure political stability exchange rate

Question 2

What is disposable income

Answer 2

• Disposable income is the amount that a customer has to spend after all their bills have been paid
• If a business wants to move into another country it may assess the level of disposable income in that country
• This helps a business to see if the citizens of the country will be able to afford the products that they want to sell there

Question 3

What is the ease of doing business

Answer 3

• Theease of doing businessindex is an index created by the World Bank Group.
• Higher rankings (a low number) indicate better, usually simpler, regulations forbusinessesand stronger protections of property rights e.g. patents

Question 4

What is infrastructure

Answer 4

• Infrastructure is the basic physical and organisational structures and facilities (e.g. buildings, roads, power supplies) needed for the operation of a society or business
• Many developing nations have been slow to get their infrastructure in place, and through failure to maintain it have let it decline

Question 5

Why is infrastructure important to sales

Answer 5

• Infrastructure can mean road, rail and transport. Without this a business cannot deliver to its customers on time
• Infrastructure can also mean telecommunications, without this a business cannot communicate with its suppliers and its customers

Question 6

What is political stability

Answer 6

• The world bank has a series of worldwide governance indicators, one of which is the political stability and absence of violence and terrorism
• Political instability in a country could be a major risk factor so should be taken into consideration when assessing a potential country as a market for your products

Question 7

What are exchange rates

Answer 7

When assessing a country as a potential market a business will look at the exchange rates:
- Strong
- Pound
- Imports
- Cheaper
- Exports
- Dearer