Selected Country: Tunisia
Selected Product: Dry Wheat
- Each team member should look into any political, legal or economic/financial, technological/infrastructure issues related to entry in his/her country.
- Each team member should look at elements that would make that country particularly attractive such as economic growth, per capita GDP or size of the middle class..a suggested, but by no means inclusive list appears at the end of this document.
- Please note that your individual country investigations should be conducted such that when you proceed to your Week 5 assignment that you are comparing apples to apples.
Some points to consider for your individual paper for Week 4:
- Host Country Issues to Consider
- Political stability: Is the country likely to remain politically stable? If not, a direct investment could be a very risky approach. Do not automatically equate democracy with stability. Many companies are doing very well operating in communist countries such as China or Vietnam or oligarchies such as Saudi Arabia and the United Arab Emirates.
- Legal protections: Is the legal system developed and open? Could you count on fair treatment if you had contractual disputes with local entities or partners? Your obligations to employees may also differ, adding significant costs to layoffs, for example.
- Openness to FDI: Does the government place restrictions on ownership? In some markets, you may have to have a local partner in order to be allowed to operate in the country, hence a wholly-owned subsidiary and complete control will not be possible. Even if a forma restriction is not in place, often governments will be more “welcoming” if there is some local ownership which can facilitate operations.
- Economic stability (including currency risks): Is the economy in a period of growth, is there runaway inflation, and is the currency likely to rise or fall in value which could negatively affect your costs and profits? Also verify that it is possible to repatriate your profits back out of the country.
- Economic development: Can the market actually afford to purchase your product? Per capita GDP and size of the middle class can give strong clues as to market potential for consumer goods.
- Social development: Are there educated and skilled workers available in the country? Would a caste or class system possibly inhibit your human resources flexibility?
- Cultural issues: Would your product be “culturally acceptable” to the market place? How could you find out if the subject matter of your product is not socially acceptable in your market? Products you take for granted, such as large refrigerators, wouldn’t sell in countries in which consumers prefer to shop almost daily for fresh foods.
- Technology issues: Is your product too advanced to be technically supported in the new market? Would a “de-featured” product be more appropriate, for example? Developed markets normally want more features and functions, but without a service network in place, a less sophisticated product may have less faults and serve market needs better.
- Infrastructure Issues: Is there the infrastructure in place to allow for manufacturing, distribution, and promotion? Without a viable road, rail, or air network, how can you distribute your product? If the communications infrastructure is weak, how would you communicate with the home country when your business communications is Internet and telecommunications dependent?
- Market Issues to Consider
- Size of your market: Try to estimate the potential size of the market so you can verify that the venture could generate sufficient revenues and profits.
- Local competition: Are there local firms already competing in your market sector? Are they well-entrenched with strong brand awareness and loyalty?
- Foreign competition: Are your global competitors already in the market? Would they have first mover advantage, or could you effectively compete?
Each team member will upload a 4-5-page country analysis paper in APA format assessing the relative attractiveness of his or her country for the project, including a summary of the risks and the potential benefits of launching the team’s selected product into his or her country.
Value: 10 individual Points