International Market Evaluations, Part I: The Fundamentals

International Market Evaluations, Part I: The Fundamentals image IntlMarkEval7International Market Evaluations, Part I: The Fundamentals

Market evaluations are designed to complement companies’ strategic planning by providing systematic and objective assessments of growth opportunities. Market evaluations analyze elements of the market environment, including drivers, environmental risks, product/technological landscape, and competitive landscape. Each component can play a critical role in determining a company’s ability to achieve growth targets.

The topic of international market evaluations is of great importance as companies look to access new markets and gain a competitive advantage globally. The increased demand for information and support in this area, as well as identifying successful research methodologies, demonstrates the importance of this topic for growing companies.

The First Steps of a Market Evaluation

International market evaluations, particularly in emerging markets, are often difficult to perform because of missing or non-aligned data. Each market has different levels in the quantity and quality of information, which can significantly impact the effectiveness of the analysis. Despite this issue, all market evaluations should attempt to include the following basic components:

International Market Evaluations, Part I: The Fundamentals image IntlMarketEval 1024x7757Three Fundamental Components of a Market Evaluation

Additional Components of a Market Evaluation

Upon the understanding of size, growth and drivers, the remaining four fundamental components of a comprehensive market evaluation are environmental risks, technological shifts, channels to market, and competitive landscape. The overarching goal of these fundamentals is to further differentiate the opportunity and identify at a high-level how the opportunity may best be addressed. For example, decisions such as whether to invest in a new fleet or in refurbishing an older fleet, whether to offer services beyond physical transport of goods, or whether to partner with a local company are addressed with these components.

    • Environmental risk is the likelihood that the market’s operating environment changes and that external factors will shift market demand. These changes include legal, political, or regulatory shifts. With the rise of emerging markets, gauging environmental risk – the likelihood that industry subsidies dry up, or, in extreme cases, the chance an industry may be nationalized – becomes all the more important.
    • A focus on the technological landscape allows companies to understand whether the product will thrive in a given market.

International Market Evaluations, Part I: The Fundamentals image IntlMarketEval2 1024x3357Questions to Answer Within Technological Landscape

    • Channel to market implies a deeper look at whether your existing structure – manufacturing, sales and marketing, logistics – is transferable to a new market. Whether you decide to pursue an export strategy or to manufacture for local markets, a company will need to consider the infrastructure that exists to get your product in the hands of your target customers.
    • A review of the competitive landscape seeks to shed light on what your market penetration might be and from whom you need to take market share. It can provide insight into how customers work with their suppliers and help you determine what will set you apart. Profiling competitors’ revenues, operations, and product ranges, among other items, can give you a topline understanding of what you need in order to compete.

Expanding on the Fundamentals: Moving Towards a Full-Scope Approach

The fundamentals of a market assessment only offer companies with a high-level understanding of the marketplace. Frequently, a more detailed analysis is required to make an actionable strategic decision. The next installment of the International Market Evaluation  series will discuss the expanded components of a market evaluation, and how they can have an impact on a company’s strategic initiatives.  Also, I will identify the most effective research methods used to uncover conclusive findings for each of the expanded components. In the final installment of the series, I will discuss how to incorporate systematic and objective assessments into your company’s strategic planning.

What fundamental component of a market evaluation has been the most difficult for your company to analyze? 

More Business articles from Business 2 Community:

Loading...
See all articles from Business 2 Community

Friend's Activity