chapter 8

Question 1

SME market selection approach

Answer 1

opportunistic approach, IMS is often simply a reaction to a stimulus provided by a change agent.

Question 2

LSE market selection approach

Answer 2

systematic approach. Allows a company to regard IMS as a process that balances firm and environment

Question 3

Two groups of potential determinants of choice of foreign markets

Answer 3

• Environmental characteristics

- Firm characteristics

Question 4

International market segmentation steps (4)

Answer 4

1. selection of the relevant selection criteria
2. Development of appropriate segments
3. Screening of segments to narrow down the list of markets -> choice of target market
4. Microsegmentation: develop segments in each qualified country or across countries

Question 5

Criteria for effective segmentation (4)

Answer 5

• Distinct
• Accessible
• Measurable
• Profitable

Question 6

General characteristics (10)

Answer 6

Geographic
Language
Political factors
Demography
Economy
Industrial structure
Technology
Social organization
Religion
Education

Question 7

Specific characteristics (4)

Answer 7

Cultural characteristics
Lifestyle
Personality
Attitudes and tastes

Question 8

Preliminary screening

Answer 8

Market/countries are screened primarily according to external screening criteria, the state of the market (macro-oriented)

Question 9

Fine-grained screening

Answer 9

The firm’s competitive power in the different markets can be taken into account

Question 10

‘income elasticity’ of specific product and industry consumer-related expenditures in a country. It reflects the tendency of consumers to spend, in a specific product or category, in response to a rise in their income

Answer 10

Country responsiveness

Question 11

Screening criteria that are used to exclude countries in advance as potential future markets

Answer 11

Knock-out criteria

Question 12

BERI

Answer 12

Business Environment Risk Index, a tool used in the coarse-grained, macro-oriented screening of international markets (focus on political risk of entering)

Question 13

A countries
- Market attractiveness & competitive strength
-

Answer 13

High market attractiveness & high competitive strength

Primary markets, key markets which offer the best opportunities for long-term strategic development. Companies may want to establish a permanent presence

Question 14

B countries

Answer 14

Secondary markets, where opportunities are identified but political or economical risk is perceived as being too high to make long-term commitments

Question 15

C countries

Answer 15

Tertiary or ‘catch what you can’ markets, perceived as high risk, and so the allocation of resources will be minimal. Objectives are short-term and no real commitment of companies