International Business Environment & Strategy

BC430002S

Determinants of national advantage – and where in the world to locate

Market entry © Robert Jones 2010 & 2011

http://www.bbc.co.uk/news/business-15573991#tooltip19 04nov2011

Factors influencing national advantage

Market entry considerations

How enterprises adapt to these pressures

Porter, M. (1990) Competitive Advantage of Nations, Macmillan Ellis, J. & Williams D. (1995) International Business Strategy, Pitman

Factor conditions skills, resources

technological base infrastructure

Demand conditions

Firm strategy, structure &

rivalry

Related & supporting industries

Chance

Govt policies

Porter M.E. (1990) Competitive Advantage of Nations, MacMillan

Porter’s Diamond The Determinants of National Advantage

Market Entry Mode grid Adapted from:- Ellis, J. & Williams D. (1995) International Business Strategy, Pitman

Market entry Entry to nation A Entry to nation B Entry to nation C

Key factors – take care whether positive or negative

Weight 1-10 [1]

Value 1-5 [2]

Weighted score [1]x[2]

Value 1-5 [3]

Weighted score [1]x[3]

Value 1-5 [4]

Weighted score [1]x[4]

Opportunities available Skills availability Resource availability Degree of control req’d

Investment required Level of risk Political Level of risk Economic Level of risk Social Level of risk Tech Speed to implement Expected return Total weighted score Rank order

Macroenvironment – PESTEL

Exhibit 2.2!

Political!•  Government stability!•  Taxation policy!•  Foreign trade

regulations!•  Social welfare

policies!

Economic!•  Business cycles!•  GNP trends!•  Interest rates!•  Money supply!•  Inflation!•  Unemployment!•  Disposable income!

Macroenvironment – PESTEL

Exhibit 2.2!

Sociocultural!•  Population

demographics!•  Income distribution!•  Social mobility!•  Lifestyle changes!•  Attitudes to work and

leisure!•  Consumerism!•  Levels of education!

Technological!•  Government spending on

research!•  Government and industry

focus on technological effort!

•  New discoveries /developments!

•  Speed of technology transfer!

•  Rates of obsolescence!

Macroenvironment – PESTEL

Exhibit 2.2!

Environmental!•  Environmental

protection laws!•  Waste disposal!•  Energy consumption!

Legal!•  Competition law!•  Employment law!•  Health and safety!•  Product safety!

Key Aspects of PESTEL Analysis

•  Not just a list of influences •  Need to understand key drivers of change •  Drivers of change have differential impact

on industries, markets, and organisations •  Focus is on future impact of environmental

factors •  Combined effect of some of the factors

likely to be most important

Interna'onal  comparisons  of  enterprise  

©  Robert  Jones  2011  

WEF  GCI  World  Economic    Forum  –  Global  Compe''veness  Index  

http://www.weforum.org/issues/global-competitiveness

WEF Global Competitiveness

http://www.youtube.com/watch?v=kzn9-M2umFQ

Doing Business 2011

Doing Business 2011

PwC EM20 Index: 2009 Interim Update

http://www.pwc.co.uk/eng/publications/0309_em20_podcast.html

Emerging Markets - Balancing Risk & Reward The PricewaterhouseCoopers EM20 Index 2009 Interim Update

PwC EM20 Index: 2009 Interim Update

http://www.pwc.co.uk/eng/publications/0309_em20_podcast.html

Emerging Markets - Balancing Risk & Reward The PricewaterhouseCoopers EM20 Index 2009 Interim Update

Doing Business 2011

http://www.internationalbusinessreport.com/files/ibr_goverview_2010_final.pdf

Grant Thornton IBR International Business Report 2010

http://www.internationalbusinessreport.com/

Tax  

Who  pays  the  most  tax?  

Where  is  the  best  place  to  do  business?    

http://www.oecd.org/dataoecd/9/23/48193734.pdf

OECD 50TH ANNIVERSARY CHALLENGES IN DESIGNING COMPETITIVE TAX SYSTEMS

Paris, 30 June 2011 Tax Reform Trends in OECD Countries

The Forbes Tax Misery Index Overall Tax Burden

http://www.forbes.com/global/2009/0413/034-tax-misery-reform-index.html

Control Risks RiskMap 2011

RiskMap 2011 provides a critical assessment of global, regional political, security and business issues that will prove a challenge in 2011 and beyond

http://www.control-risks.com/pdf/Control_Risks_RiskMap2011.pdf (04nov2011)

http://www.internationalbusinessreport.com/Reports/2010/Reports/global-overview/index.asp (04nov2011)

Grant Thornton IBR International Business Report

World Economic Forum WEF The Global Competitiveness Report 2011-2012 http://www.weforum.org/issues/global-competitiveness (04nov2011)

World Bank Doing Business 2011

http://www.doingbusiness.org/reports/global-reports/doing-business-2011 (04nov2011)

Control Risks http://www.control-risks.com/pdf/Control_Risks_RiskMap2011.pdf (04nov2011)