Woche 7
Opportunity Assessment
Opportunity Assessment
Set of flashcards Details
| Flashcards | 30 |
|---|---|
| Language | Deutsch |
| Category | Micro-Economics |
| Level | University |
| Created / Updated | 24.12.2023 / 10.01.2024 |
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The Motivation Check - Which are the 3 factores to consider before internationalize?
- Drivers: What forces us to internationalize?
- Benefits: What do we hope to gain by increased internationalization?
- Synergies: What additional benefits can be created?
- Drivers
- Pull (proactive, intrinsic) Drivers = Control (Inside organization)
- Push (reactive, extrinsic) Drivers = No Controll (outside organization)
Motivation Check - Name 6 Drivers:
- Political drivers
- Economical drivers
- Societal drivers
- Technological drivers
- Environmental drivers
- Legal drivers
Motivation Check - Benefits - What do firms hope to gain by internationalize
- Subsidiary Skills: Competence development & transfer from subsidiairy abroad to head office and in the global web
- Experience Effects: Learning effects (Economies of scope) and Economies of scale (semiconductors, pharmaceuticals)
- Location Economies: Value creation in a optimal location, and creating a global web
- Expanding the Market: Superior product without international competition / Unique competencies
Internationalization: Benefits
- Greater Flexibility
- Lower susceptibility to shocks
- Scale, scope and cost advatages
- Higher ROA and post-tax ROA
- Superior production and supply activities
- Higher market value
Internationalization: Costs
- Higher costs
- Reduced control
- Problems of joint control in Joint Ventures
- Long-run business impairments through behavior locally seen as unethical (Ex: UBS in USA & Germany)
- Costs of litiation (Rechtsstreit) (Ex: ABB, Sulzer MEdia/Centerpulse - now Zimmer)
What do companys hope to achieve by internationalization?
- Market Expansion
- Diversification
- Economies of Scale
- Increased Sales/Profitability
- Access to Resources
- Competitive Advantages
What are the risks of internationalizing?
- Cultural/Language Barrier
- Political and Regulatory Risks
- Economic Risks
- Supply Chain Disruptions
- Legal Risks
- Financial Risks
What are the risks of NOT internationalizing?
- Missed Market Oppertunities
- Increased Competition
- Dependency on domestic Economy
- Reduced Inovation
- Limited Talent Pool
- Supply Chain Vulnerability
According to Rockart (1979) are critical success factors defined as:
"The limited number of areas in which satisfactory results will ensure successful compmetitive performance for the individual, department, or oranization"
Readiness Check - Name 5 types of critical success factors:
- Industry Critical Sucess Factors: Resulting from specific industry characteristics (Regulatory Environment (Permit, Lincences)/Technological Disruption)
- Strategy Critical Sucess Factors: Resulting form the chosen competitive strategy of the business (Clear Visiosn/Effective Execution/Continous Analysis and Adaptation)
- Environmental Critical Sucess Factors: Resulting from economic or technological changes (Local regulations, political changes)
- Temporal (Zeitlich) Critical Sucess Factors: Resulting from internal organizational needs and changes (Time to market efficiency/Timely decision making)
- Managerial Critical Sucess Factors: Resulting from managerial performance deemed to be critical to the sucess of a organization (Leadership/Talent Management/eCommunication)
Company Readiness - Name 3 barriers for companys to Internazionalize
- Lack of knowledge
- Lack of networks
- Lack of resources
Product Readiness - Name some characteristics for a market fit between a product & the international cutomer/market:
- Customer characteristics
- Competitive positioning of the brand
- Pricing
- Distribution Chanels
- Logistic, transportation, landing costs
- Competition
- Channel effort & productivity
Market Readiness - Name 6 factors to consider before a market entry:
- Industry Trends
- Standards & Regulation
- Customer Requirements
- Competition Intensity
- Distribution
- Tariff & Non-tariff Barriers
Market Readiness - List 3 factors of a Global (Standartization) strategy / Localization (Differentiation) Strategy:
GLOBAL:
- Global low-cost production and selling
- Global roll-out of concepts at high-speed
- Low complexity
LOCAL:
- culturally close to the costumer
- Regional and local market penetration
- Flexible response to local customer needs
Market Readiness - 3 questions that a company has to ask themself before internationalize:
- Do we have the necessary resources?
- Do we have (minimum valiable) product to offer?
- Which markets are ready for our offering?
Market Selection & Entry - Frstly, a company has to ask themselve 3 questions:
- Target: Which market? Politic stable, low inflation, free market
- Pacing: How fast? When?
- Scale: With which market methods? - Internalization/Externalization (Export, JV, Franchise; FDI...)
Market Selection & Entry Mode - Which 8 factors are there to consider if the country to internazinalize, fits the proper target market.
- Market Size
- Growth Rate
- Receptivity to Imports
- Competition
- Economic Freedom
- Consumption
- Infrastructure
- Country Risk
Claim first mover advantage when:
- Brand is a key decision factor (over features)
- The subject is new and topical
- Industries where vaule rises exponentially (as user grow)
- Product categories over services
- In fast moving moving technology markets, where advantages are short lived
etc..
The choice of entry mode is a trade-of between growth opportunity, and risk:
Externalization (Exporting) - Internalization (FDI,JV)
It depends on various factors such as costs, strategic objectives, risk tolerance, resources etc.
Repetition - List 3 Internalization checks:
- Motivation Check
- Readiness Check
- Market Selection & Entry
Repetition - Name the 3 elements of the Motivation Check:
- Drivers
- Benefits
- Synergies
Repetition - List the 3 elements of the Readiness-Check:
- Company Readiness
- Product Readiness
- Market Readiness
Repetition - Describe the three elements of the Market Selection & Entry Check:
- Target - What are the necessary market condition for us?
- Pacing - How quickly do we want to go abroad?
- Scale - What market entry methods are the best?
Which market research tools relies on known information about one product to infer the market potential of another product?
- Proxy indicator
Trade as a percentage of GDP is used to measure ________.
- Market Receptivity (Aufnahmefähigkeit des Marktes)
The buying power of the country's residents is termed as ________.
- Market Intensitiy
Which following tasks in the global market opportunity assessment process should be performed directly before the task of estimating company sales potential?
- Choose qualified foreign business partners
A researcher who assigns scores to countries for their overall market attractiveness uses ________ to choose the most promising foreign markets.
- Indexing and Ranking
Describe 3 characteristics of an atractive market:
- Politically Stable
- Free Makret Systems
- Relatively Low Inflation rates
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