4.2 assessing a country as a market

Question 1

levels and growth of disposable income

Answer 1

it is important that consumers within the country the business would want to sell in have a high disposable income to purchase its goods and services, it is also important that the disposable income is steady and growing

Question 2

ease of doing business

Answer 2

it is important that a company faces minimal problems when setting up, trading day to day or goods entering the country

Question 3

infrastructure

Answer 3

the quality of transportation in a country is important to ensure employees or customer can easily access the business, it is also important that a business’ transportation costs are cut as low as possible

it is also important that the business can easily communicate in order to co-ordinate production, sales and distribution

Question 4

political stability

Answer 4

a country with a calm and stable political climate would minimise uncertainty, which would make that country more attractive as a potential market to investors

Question 5

exchange rate

Answer 5

if the business’ domestic currency depreciates against the foreign country they want to invest in, it would put them at a disadvantage as their costs would rise. but they would also have to ensure that they are not charging high prices to consumers if their currency appreciates