Assessing a country as market 4.2.2

Question 1

Infrastructure

Answer 1

It considers factors such as roads, transportation and communication. Good infrastructure improves the production process and delivery of goods/services to the customer which reduces costs and increase sales

Question 2

Ease of doing business

Answer 2

Businesses will find it easier to trade with countries with similar cultures and languages. They also need to take into account the laws in the country they’re entering.

Question 3

Levels of growth and disposable income

Answer 3

Disposable income is the income individuals have left after paying taxes etc. Selling products in a country with higher disposable income is likely to lead to more sales

Question 4

Exchange rate

Answer 4

An exchange rate is the price of one currency in terms of another. Businesses moving to countries with stronger currencies can import raw materials and components at a lower price

Question 5

Political stability

Answer 5

A country with political instability will be subject to corruption, lack of law enforcement and higher levels of crime. It is more likely to have disruption to trading so there is a risk of not gaining a return on their investment in a country with political instability