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Market selection is a set of stages which include preliminary screening which identifies potential markets as data for further evaluation and in depth analysis and identification/in-dept screening and final selection. According to Sakraya macro-level indicators are used to eliminate emerging markets that do not meet the objectives of the venture.
Market size, growth rate, fit between customer preferences and the product and competitive rivalry constitute proposed screening criteria.
Identification stage involves assessment of industry attractiveness and forecasts of costs and revenues for the short-listed countries.
The final selection stage determines the market which best matches the ventures objectives and available resource leverages
The rapid growth rates of emerging markets surpass the traditional capital venture.
If well planned and ventured, emerging markets offer long term growth opportunity. This is spawned by low competition, high levels of disposable incomes, huge market potential and consumers and favorable economic liberalization. This rapid growth, high loss potential and huge profitability has led to their tagging as emerging markets.
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The drivers of this rapid growth and risk are the young customers and middle age spenders with huge purchasing power.
The success of emerging markets ventures are based on establishing corporate relations with the right organizations, influence in local governments, high consumer demand, use of highly qualified local managers and executives, low marketing costs and innovative approaches to the markets. Review of strategic planning and market entry methodologies The long term growth of a venture depends on the hosts market potential. The market potential is categorized as the size of the market and market growth rate as well as product acceptance.
Culture distance determines the efficiency of growth drivers of the venture. Globalization has made adapting to emerging cultural needs in corporate growth and diversity. The diversity of culture is in five dimensions all which are projected by Sakraya as follows ‘power distance, uncertainty avoidance, and individualism/collectivism, masculinity/femininity and time orientation. Models of globalization imply that companies select markets similar and physically close to their domestic market as they are easier to learn and understand.
Cultural differences in distant and unfamiliar markets on the other hand, disturb the flow of information and present barriers to a firm’s learning about and understanding of the foreign environment, leading to perception of uncertainty (Sakraya ppr 10). Competitive strength of the industry matters a great deal in driving the venture a notch higher through understanding various aspects of business ethics. Understanding the aspect of competition helps the venture strategize on how to place the product in the market so as to give it a competitive edge in the market.
Customer receptiveness drives the competitive edge of the products projecting the company’s place in the market. Consumer behavior shows differences in various consumer attitudes to international products. Some cultures shun these products in favor of local and traditional products. Conclusively Sakraya attempts to contextualize the basic elements of market selection as dependent on strategy that insures a consistent approach to offering the venture product or service in a way that will outsell the competition.
However, in concert with defining the marketing strategy venture managers must also have a well defined methodology for the day to day process of implementing it. Policies and venture Structural reforms as discussed by Sakraya in the Turkish economic reforms cover the importance of proper evaluation of venture. Many companies selling internationally are successful through using a standard marketing strategy its wrong to assume this approach will work without sufficient research that addresses the availability of resources required to assist a company in its global marketing efforts.
Key issues like strategy, marketing and advertising, budget allocations, market viability, forex rates and infrastructure as well as political and economic well being of the emerging market have to be addressed from a more decisive point of view. Sakraya emphasizes on proper and more concise information the GDP, political stability, relationship with neighbors and risks posed by such factors should be on the fore front before embarking on investing in the market.
Economic progress of the emerging market in the recent past as a nation and major gains and reforms in the foreign investments provisions should be a key element of interest to venturing companies. Conclusion Emerging markets, though offering quick solutions to expansions and short profitability for ventures pose threats to venture capital due to the cyclical nature of the drivers. The need for adequate market entry stratagems are the keys to successful ventures in emerging markets. Sakraya draws out the elements of evaluating the viability of emerging markets from the perspective of models of market entry.
The potential of emerging markets is a tricky venture for capital based venture due to uncertain emerging corporate weather driven by economic drivers and political weather. Investing in emerging markets requires a lot of insulation against impending storms which include alternative capital incase of collapse of both political and financial institutions in the market. However, the lucrative nature based on high profitability driven by the dynamic young and middle level clientele is in fact sufficient insulation for short term profitability.
As such, emerging markets offer solutions for capital growth and expansion for short term goal oriented corporations. Besides, making huge profits from such ventures like e-trade and ICT ventures, the emerging markets offer bigger business apertures for investment and consultancy services. As such the risk and profit potential in the emerging market offer both the profitability required to expand and prosper as well as lessons to insure and learn how to insulate a corporations against impending business storms.
Models of market selection. (2020, Jun 02). Retrieved from https://studymoose.com/models-of-market-selection-new-essay
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