assessment of a country as a market Flashcards
what makes a market attractive?
- levels and growth of disposable income
- ease of doing business
- infrastructure
- political stability
- exchange rate
explain levels and growth of disposable income
how is this analysed?
And what does this mean for a business?
what question should be asked (negative)?
= the amount of money left after tax has been deducted
- Can use GDP per capita to analyse
- As people get wealthier, they spend money differently
- Move to non-necessity products/services
- Is growth sustainable?
- Look at debt levels – gives an idea of future tax levels and public spending
explain the ease of doing business
and examples
- efficiency of businesses
- how quick it is to start a business
e.g. days to get electricity
- tax levels and systems
- raw materials that may need to be imported
- construction permit
explain infrastructure
what does better infrastructure lead to?
= the underpinnings of an economy
e.g.
- communication = internet, mobile reception
- transportation
- airports/seaports
- warehousing facility
better infrastructure = goods can be transported faster and more reliably making a just-in-time operation possible, keeping costs down and goods fresh
explain political stability
= impact on the relationship between government and business
- tax regulations
- minimum wage
- ease of hiring/firing
explain exchange rates
= price of one currency against another
- has a large impact on businesses operating internationally
- Long-term trends tend to lead to a consistent rate
BUT short-term spikes/drops impact WHEN it is a good time to invest or not
how does a business decide which market a business is looking to go into?
- SWOT analysis
- PESTLE factors
- Number of existing competitors – market shares
- Brand power
- Maturity of the market in that country
define assessment of a country as a market
weighing up the market strengths of one country against another
