Look at the following infographics

Think pair share:Which country would be

attractive and why?

TOPIC 3

HOW DOES A COMPANY DECIDE WHICH COUNTRIES TO TARGET?

ASSESSMENT OF COUNTRY MARKETS

Learning Objectives by the end of this lesson students at ….

• Will be able to evaluate why certain factors attract a business to a country

Evaluation ~

GCE Grade A*

• Will be able to propose countries that are attractive to businesses

Synthesis~

GCE Grade A

• Will be able to analyse the factors that attract a business to a country

Analysis ~

GCE Grade B

• Will be able to demonstrate understanding by using examples/cases

Application ~

GCE Grade C

• Will be able to explain the attractiveness of some countries

Comprehension ~ GCE Grade D

• Will be able to recall factors that make countries attractive

Knowledge ~

GCE Grade E

10

1

Success Criteria

Assessment of country markets

Size, economic growth and wealth are not the only important criteria

There are many important questions that must be researched

How well-developed is the country?

Human Development Index – useful as it ranks countries in relation to several aspects of development

It provides a measurement based on: Health care (life expectancy) Education (adult literacy rates, %ages of age

groups enrolled in school) National income (measured by GDP per

capita)

On your whiteboard write down:• Why do you think these issues will

help decide on investing in that country?

Human Development Index

Extension Task:

Any negative side to using this index as a measure?

2 mins

Think pair share

How well-developed is the country?

A workforce with limited education and poor health care will not be attractive to potential employers

If small number of rich people and many poor people, it limits the markets for their products

How stable is the government?

Political instability can make some markets very unattractive

There is a trade off between risk and profitability

Businesses seek to develop relationships with politicians in order to reduce the risks

Is there a legal framework that will protect businesses?

Sometimes in place but not always Some emerging economies have laws that

enable businesses to go through courts to collect bad debts

Some economies, the legal system is slow

E.g. China does not have a reliable legal system, there are issues with counterfeiting products

Are there problematic government policies?

Government controls can be a problem for foreign businesses. The following need to be considered:

How much tax will the business have to pay? Level and way collected can be different

Are there significant barriers to trade? Some governments tax imports and restrict

quantities How difficult is it to start up a business?

Bureaucratic controls can be time consuming How favourable is the exchange rate?

Undervalued exchange rate can be a problem with competition

Will there be government grants or subsidies available? In the EU, these are regulated to ensure fairness

Cultural and media issues

Businesses need to understand local cultures

More is known now about how to adapt to host countries’ expectations

Learn from other businesses mistakes

The Labour market

How easy is it to recruit labour with appropriate skills for the technologies that will be used

A budget for training programmes will need to be considered

Trade offs considered between paying low wages and recruiting people with human capital

Corporate Policy

Businesses are different in the extent to which they want to expand abroad

Some want to expand to diversify to reduce risk

Some businesses are addicted to growth (Tesco)

Some expand to find new sources of resources (mining)

Lower costs abroad for production Progress Arro

w

Task

Watch the video

China, India and the rest of the developing world will eclipse the west in a dramatic shift in the balance of economic power over the next 50 years, according to research by the Organisation for Economic Co-operation and Development (OECD).

www.guardian.co.uk/global-development/datablog/2012/nov/09/developing-economies-overtake-west-2050-oecd-forecasts

GDP growth across OECD

GDP growth for OECD countries predicted to 2050: how the rankings change

Corporate Policy

Which countries would you target Why? Use Diamond 9 to rank in order

Which to target 1st at top 

   

  

 

 

 

 

1

2 3

4 5 6

7 8

9

Lesson Keywords

Corporate policy The labour market Political stability Human Development Index

On your cards

Topic 3: Assessment of country markets

Write down: 2 or more things you found easy to

understand/ remember from the lesson

What did you find difficult to understand

Exit pass

Learning Objectives by the end of this lesson students at ….

Evaluation ~ GCE Grade A*

•Will be able to evaluate why certain factors attract a business to a country

Synthesis~ GCE Grade A

•Will be able to propose countries that are attractive to businesses

Analysis ~ GCE Grade B

•Will be able to analyse the factors that attract a business to a country

Application ~ GCE Grade C

•Will be able to demonstrate understanding by using examples/cases

Comprehension ~ GCE Grade D

•Will be able to explain the attractiveness of some countries

Knowledge ~ GCE Grade E

•Will be able to recall factors that make countries attractive

10

1

Success Criteria