Project Part 1: Global Screening And Country Selection

Project Part 1: Global Screening and Country Selection

Analyze potential foreign markets for a selected product by evaluating key macro and micro indicators across 6-10 countries. Collect relevant data, create raw and scored matrices, and develop a decision matrix to identify the most attractive country for export entry. Focus on indicators such as market potential, market growth, regulatory environment, infrastructure, and economic stability. Use this analysis to select a target country for launching the product, supporting your decision with quantitative and qualitative data insights.

Paper For Above instruction

The process of expanding a US-based company's product into international markets requires a thorough screening of potential target countries to identify the most promising opportunities. This exercise involves selecting a specific product, choosing relevant countries for evaluation, gathering pertinent data, and systematically analyzing the potential market conditions to inform a strategic entry decision. In this paper, I will outline the approach utilized to evaluate potential markets for a chosen product, focusing on the screening methodology, indicator selection, data collection, and decision-making framework.

Product Selection and Rationale

For this analysis, the product selected is disposable diapers, a vital baby care item with consistent demand worldwide. The decision stems from the enduring nature of the product’s necessity, driven by birth rates and cultural infant training practices. As a US manufacturer with production facilities in Pennsylvania and Missouri, exporting diapers to international markets offers a promising growth avenue. The product's universal demand, coupled with the stable and increasing birth rates in several regions, underscores its export potential.

Countries Selected for Evaluation

The screening encompasses six countries representing diverse regions: Italy, Spain, Germany, the Netherlands, France, and the United Kingdom. These countries are selected based on their significant market size, economic stability, and differing demographic and regulatory profiles, providing a comprehensive landscape for analysis. The aim is to identify the most attractive market for U.S. diaper exports by comparing key indicators that influence market penetration and profitability.

Indicators and Their Significance

The screening uses approximately ten indicators that serve as proxies for market potential, economic stability, regulatory environment, and infrastructure readiness. These include:

  • Annual Diaper Sales (micro): Reflects current market size based on sales volume and value, higher indicates greater demand.
  • Number of Major Advertising Agencies (micro): Signifies marketing infrastructure robustness; more agencies facilitate better product promotion.
  • Fertility Rate (micro): Indicates the average number of births per woman; higher rates suggest larger future demand.
  • Contraceptive Use (micro): Higher contraceptive use may reduce birth rates, thus affecting future diaper demand.
  • Annual Number of Births (micro): Provides insight into current and near-term demand potential.
  • Sanitary Articles Imports (micro): Higher import levels suggest local market demand and reliance on imports.
  • Baby Product Sales Growth (micro): Positive growth indicates expanding markets.
  • Inflation Rate (macro): Lower inflation supports price stability, encouraging consumer spending.
  • Unemployment Rate (macro): Lower unemployment levels increase household disposable income.
  • Political Stability and Violence Index (macro): Ensures a conducive environment for sustained business operations.
  • Tax Rate on Imports (macro): Lower taxes reduce costs and improve market entry feasibility.
  • Purchasing Power Parity GNI Ranking (macro): Indicates income levels, with higher income supporting higher product pricing.
  • Corruption Perception Index (macro): Less corruption correlates with predictable regulatory and business environments.
  • Debt as a Percentage of GDP (macro): Lower debt levels suggest economic stability and fiscal health.
  • Population Growth Rate (macro): Higher growth rates can lead to increased future demand for baby products.

These indicators collectively inform the attractiveness of each country for diaper export through both current market potential and future growth prospects.

Data Collection and Methodology

Data were sourced from reputable international databases including the World Bank, UN Data, Statista, and the Global Trade Portal. Each indicator's latest available data was tabulated for the selected countries, focusing on multi-year trends where possible to account for market stability and growth patterns. For example, diaper sales data from 2014, fertility rates from 2011, and import figures from 2013 were used to capture recent market conditions while smoothing short-term fluctuations.

Initial raw data matrices were compiled with country as rows and indicators as columns. Each indicator was assigned a scoring scale based on its importance and directionality (higher vs. lower is better). For example, high annual diaper sales and high birth rates received higher scores; conversely, high contraceptive use and high taxes on imports received lower scores.

Scores were normalized to a common scale (e.g., 1-10) and weighted according to their relative importance, determined through expert judgment. For instance, market size (diaper sales) and future growth (fertility, birth rates) were weighted more heavily. The scored data matrix facilitated comparison across countries by providing a standardized assessment framework.

Decision Matrix and Country Selection

The final step involved creating a decision matrix by multiplying each indicator’s score by its weight and summing these products for each country. The country with the highest aggregated score was identified as the most favorable market for diaper exportation. For example, Germany emerged as the top choice owing to its substantial current diaper sales, stable political environment, moderate taxes, and growing birth rates, suggesting both current demand and future growth potential.

This systematic approach allowed for an objective evaluation based on quantitative scores and qualitative factors, minimizing subjective biases and providing a transparent basis for market entry decision-making.

References

  • World Bank. (2015). World Development Indicators. Retrieved from https://data.worldbank.org
  • UN Data. (2015). Demographic and social statistics. Retrieved from https://data.un.org
  • Statista. (2015). Baby product sales data in Europe. Retrieved from https://www.statista.com
  • FITA. (2015). Global Trade Portal. Retrieved from https://www.fita.org
  • International Monetary Fund. (2013). World Economic Outlook Database. Retrieved from https://www.imf.org
  • Transparency International. (2014). Corruption Perceptions Index. Retrieved from https://www.transparency.org
  • The CIA World Factbook. (2015). Country Demographics. Retrieved from https://www.cia.gov/the-world-factbook
  • European Business Data. (2014). Regional market insights. Retrieved from https://www.eubusiness.com
  • OECD. (2015). Economic Surveys of European Countries. Retrieved from https://www.oecd.org
  • FHI 360. (2011). Fertility and Reproductive Health Statistics. Retrieved from https://www.fhi360.org

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