International Business Environment & Strategy MOD001148 Determinants of national advantage – and where in the world to locate Market entry © Robert Jones

International Business Environment & Strategy

MOD001148

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

Market entry

© Robert Jones 2010 - 2013

Objectives:

To identify factors in national advantage

Which nations are the best for business?

To consider factors in international strategy formulation

How do senior managers decide which nation to expand to?

Market entry considerations

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

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

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

Factor conditionsskills, resources

technological baseinfrastructure

Demand conditions

Firm strategy, structure &

rivalry

Related &supporting industries

Chance

Govtpolicies

Porter M.E. (1990)

Competitive Advantage of Nations,MacMillan

Porter’s Diamond The Determinants of National Advantage

International research data sources - 2013

© Robert Jones 2011, 2012 & 2013

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf


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

WEF Global Competitiveness

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




144 nations



Which are the most competitive nations?

Which are the top 3 competitive nations?

Hint: they all begin with an ‘S’

http

://w

ww

3.w

efor

um.o

rg/d

ocs/

WE

F_G

loba

lCom

petit

iven

essR

epor

t_20

12-1

3.pd

f



The BRICs

The BRICs

48

67

59

29

WEFGCR rank

The BRICs



Example: competitive ranking of Canada

Example: competitive ranking of Canada

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdfPage 25


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

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

http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB14-Full-Report.pdf

189 nations compared





http://www.youtube.com/watch?v=c7Pvi11RPx0

Doing Business 2014






116

92

134

96

DoingBusiness rank

The BRICs

Doing Business 2011

Doing Business 2014

PwC EM20 Index: 2009 Interim Update

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

Emerging Markets - Balancing Risk & RewardThe PricewaterhouseCoopers EM20 Index2009 Interim Update

PwC EM20 Index: 2009 Interim Update

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

Emerging Markets - Balancing Risk & RewardThe PricewaterhouseCoopers EM20 Index2009 Interim Update

http://www.internationalbusinessreport.com/files/global%20economy%20in%202013%20-%20final.pdf




http://www.internationalbusinessreport.com/

http://www.internationalbusinessreport.com/

Tax

Who pays the most tax?

Where is the best place to do business?

http://www.pwc.com/gx/en/paying-taxes/assets/pwc-paying-taxes-2013-full-report.pdf




http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Special-Reports/Paying-Taxes-2014.pdf

Total tax rate



Time to comply

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 IndexOverall Tax

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

Objectives:

To identify factors in national advantage

Which nations are the best for business?

To consider factors in international strategy formulation

How do senior managers decide which nation to expand to?

Market entry considerations


Market Entry Mode gridAdapted 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

Weight1-10[1]

Value1-5[2]

Weighted score[1]x[2]

Value 1-5[3]


Value 1-5[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


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


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

Control RisksRiskMap 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)


Grant Thornton IBR2013 International Business Report

World Economic Forum WEFThe Global Competitiveness Report 2012-2013http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf

World Bank Doing Business 2014http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB14-Full-Report.pdf

Control Risks http://www.control-risks.com/pdf/Control_Risks_RiskMap2011.pdf

Emerging Markets - Balancing Risk & Reward The PricewaterhouseCoopers EM20 Index 2009 Interim Updatehttp://www.pwc.co.uk/eng/publications/0309_em20_podcast.html

Paying Taxes 2014 – the Global Picturehttp://www.pwc.com/gx/en/paying-taxes/assets/pwc-paying-taxes-2013-full-report.pdf
