International market selection

Question 1

Explain the systematic approach to market selection.

Answer 1

Assumptions:
The decision maker needs to be rational him/herself and take out own bias selection.
Access to all relevant information
Enough computational power - no bounded reality

6 steps to find market.

1. Problem formulation:
2. Criteria identification:
   - General characteristics e.g. geographical location, demography, religion, education, which either can have a high degree of measurability or low degree.
   - Specific characteristics: Cultural, lifestyle, attitudes and tastes, which either can have a high degree of measurability or low degree.
3. Weiging the criteria
4. Identifying potential markets
5. Ranking markets, based on criteria
6. Compute optimal decision

Question 2

Explain the non-systematic approahc to market selection. How is this connected with the learning perspective?

Answer 2

• Basically same as learning perspective
  Risk aversion and Experiental knowledge are fundamental -> lack of knowledge is an impediment to internationalization. We start out internationalizing in markets, which are easily understood. Over time greater distance is added.

 Market knowledge -> commitment, then current activities -> market commitment (Johanson and Vahlne). Experiental knowledge: Event -> experience -> reflection. (can only be learned through personal experience)
 We do not belive Tesla follows this approach to market selection as the shower Tesla by entering nine markets in two years did not have time to learn from this. Futhermore it does not choose country per the Establishment chain.

..Use CAGE framwork

Question 3

Explain the relational approach to market selection. How is this theory connected to the learning perspecive?

Answer 3

This approach to market selection includes firm tapping into a network of firms and using these to get power..

Assumption:

1. the business environment is a web of relationships.
2. The root of uncertainty for the for it the outsidership.

Question 4

What are the level of analysis in the 3 theories for market selection ?

Answer 4

Market vs. country.

Systematic: The selling firm
Non-systematic: the selling firm
Relational: The dyad

Question 5

Which researchers on market selection?

Answer 5

Johanson and Vahlne:Market knowledge -> commitment, then current activities -> market commitment

Andersen, O. & Buvik, A. (2002): relational market approach.

Question 6

Provide examples of criterias used by the rational apprpach:

Answer 6

General characteristics e.g. geographical location, demography, religion, education, which either can have a high degree of measurability or low degree.
- Specific characteristics: Cultural, lifestyle, attitudes and tastes, which either can have a high degree of measurability or low degree.

Question 7

Draw the market attractibeness/competitive strength matrix

Answer 7

Y = Market/country attractivenes
X: competitive strength

then A, B, C countries
A is = invest/grow
B = Dominate, JV
C = Harvest, licence

Question 8

What are the four levels for contextual comparison within and across countries?

Answer 8

Douglas and Craig:

Macro-level factors: Economics factors (BNP etc)
Meso-level facotrs (Language, Culture)
Micro-level facotrs: (Media context)
Situational facotrs:
Comsumption and purchase behavior

Question 9

What is the purpose of contextual comparison within and across countries?

Answer 9

Examining context factors across different levels provides a

richer and deeper understanding regarding IMS.

Question 10

How to choose markets:

Answer 10

Rule of thumb: Physcic distance

Question 11

Relational apprach: Framework

Answer 11

Awareness, Exploration, Choice - thunnel