Factors that determine the feasibility of expanding into a foreign market.

Question 1

Define Feasibility

Answer 1

a study that identifies the **potential success **of a product in a market ,which is used to identify the viability n value of entering a market

Question 2

why would business undertake feasiblity ?

Answer 2

to determine the market potential and to decide whether or not to enter an international market.

Question 3

define Viability

Answer 3

the ability for something to work successfully

Question 4

when determining ,businesses must ask, will it provide………

Answer 4

1.a level of sales that will result in profit
2.sustainable profit over the medium long run

Question 5

what features if a market do business analyse?

Answer 5

1.Total market size
2.Level competition and number of competitors
3.Capital requirements to launch and sustain the business$
4.experience/expertise of staff and partner

Question 6

Feasibility Analysis includes assessing……

Answer 6

1.total market size (external factor) 
2.competitors in the target market (external factor) 
3.capital requirements to launch and sustain the business (internal factor) 
4.Considering the experience and expertise of staff and partners (internal factor) 

Question 6

The 4 Factors that determine the feasibilty of expanding into a foreing market:

Important to memorise

Answer 6

1.Level of demand by consumers

2.Consumption patterns

3.Competitive activity

Question 7

Define Conusmer Demand

Answer 7

The ability and wilingness of a consumer to pay a particular price for a particular product

Question 8

consumer deamand is very much restricted by what?

Answer 8

Purchasing Power

Question 9

Purchasing Power refers to?

Answer 9

Your personal ability as a consumer to spend on the goods and services that you need and want.

Question 10

why is understanding the level of demand by consumers **Before ** entering foreing market ?

Answer 10

It is critical to ensure that the product and its price is appropriate and well suited to the market

Question 11

How do we determine the demand in a market.

Answer 11

1.Estimate (Business will estimate the demand for a given product/service within a market)
2.Forecast(Business will also forecast demand over time &consider economic characteristics that impact demand
3.Key Macroeconomics Characteristics

Question 12

why is understanding Consumer Demand essential for a business entering a new market.

Answer 12

It gives them opportunity to access the amount of feasibility in that particular market.

Question 13

Consumption Patterns

Answer 13

The spending habits of households on product and services

Question 14

Consumption patterns are inlfuenced by what ?

Answer 14

social norms
product type
how they are purchase

Question 15

examples of Consumption “PATTERNS” include?

Answer 15

Fashion trends

Health and lifestyle patterns

Technology integration and functionality

Political or social views

Question 16

Consumption Patterns Represent opportunities for businesses

Answer 16

Globalised consumption patterns helped to normalise and standardise certain patterns that predictably rollout across markets.

Changing consumption patterns also represents an opportunity for a competitor to step in and claim some market share. 

Question 17

Consumption Patterns in Developing Nations

Answer 17

Developing nations can experience a change in consumption patterns. A country that grows in wealth and may create a large new middle class of people with higher wages. This represents an opportunity for businesses to expand into this market

Question 18

Consumtpiton patterns in Countries

Answer 18

1.China -increasing luxury spending
* as income rise ,Chinese conusmers now spend more on travel,IT products,Housing ,medical insurance ,entertainment and education
2.western Countries
* Rise in demand for processed ,packedd foods for value and convenince
* Rise in healthy products
* seasonal patterns like holidays/culutural events

Question 19

Social Media and Consumption Patterns

Answer 19

social medai is a productive tool for information about changes in consumption patterns.
Businesses should monitor social media trends to follow conversations about brands and consumer preferences to predict the types of products that are regerded as desirable

Question 20

How should buisness utilise Consumption patterns to determine feasibility?

Important in your exam and test discussion

Answer 20

A business can opt to take advantage of a familiar consumption pattern,or move into a market,where consumption patterns have changed .Business must be aware of chaning perceptions and political views

Question 21

why is competitor analysis important for assesing the feasibility of a global venure?

Answer 21

Assesing Strength of the competitors in the target market helps businesses to determine the potential effeciveness and likely success of their product.

Question 21

Competitive Activity

Answer 21

The** number of competitors and relative strength of competition** that exist between businesses in a market.

Question 22

Competitors to be considered

Answer 22

1) Exporters 

2) Local businesses  

3) Online sellers 

Question 23

Collecting data :

Answer 23

To determine the level of competition in a Newmarket, businesses may use primary data, secondary data, or anecdotal data.

Question 24

Primary Data

Answer 24

**Collected for the specific purpose of the business commissioning, the research. **

• based on research and observation
• may involve extensive time spent in the target country
• includes exploring competitor websites, outlets, patents and pricin

Question 25

secondary data

Answer 25

Collected for another purpose, or buy another entity, and has been reused by business.

available in published form and includes government publications, trade shows, media reports, advertising, competitor annual reports and product brochures. 

Cheaper and easier to access

May not perfectly suit businesses needs

  

Question 26

Anecdotal data:

Answer 26

**Collected at random by the business, through discussions with suppliers, customers and past employees of competitors.  **

May form an unreliable picture of the market

Easy to collect, difficult to analyse

Question 27

Why is competitive activity essential to determine market feasibility?

Answer 27

It provides businesses with an idea of the competitor marketplace ,in which they would be operating .
Business may choose to employ a firm to conduct market research on their behalf.