IBC Lecture 8 Country Evaluation and Selection

Gaborone Campus Contact Information

  • Location: Plot No:50661, Fairgrounds International, P/Bag 137, Gaborone, Botswana

  • Telephone: (+267)3953 062

  • Fax: (+267)3919 118

Francistown Campus Contact Information

  • Location: Plot No:31403, Moffat Street, P/Bag 137, Francistown, Botswana

  • Telephone: (+267)2410 558

  • Fax: (+267)2410 534

Overview of Lecture 8

  • Course Title: International Business and Consultancy

  • Lecturer: Bayang Modo

  • Focus: Country Evaluation and Selection

    • Evaluating techniques for selecting countries for business

    • Importance of country attractiveness for business decisions

Importance of Country Evaluation

  • Considerations for Firms:

    • Market Entry: Identify which countries to enter.

    • Value Chain Activities: Determine optimal locations for different operations.

    • Resource Allocation: Allocate resources effectively across countries.

    • Entry Sequence: Plan the order of entry for various markets.

    • Type of Firm: Consider characteristics of the enterprise (Micro, Small, Medium).

    • Management Characteristics: Assess management's experience and risk profile.

    • Resources Available: Financial, human, and technological resources available to the firm.

Country Selection and Evaluation

  • European Commission SME Definition: Categorization based on employee headcount and annual turnover.

    • Medium-Sized Enterprise: < 250 employees, ≤ € 50 million turnover

    • Small Enterprise: < 50 employees, ≤ € 10 million turnover

    • Micro Enterprise: < 10 employees, ≤ € 2 million turnover

Two-Step Evaluation Process

Step 1: Scanning

  • Broad examination of multiple countries to identify promising candidates.

  • Use of readily available and comparable information for initial assessments.

Step 2: Detailed Analysis

  • Feasibility and Desirability Comparison: Evaluate the selected countries.

  • Utilize indexing and ranking methods, such as comparison grids and elimination matrices.

Cultural Factors in Evaluating Countries

  • Frameworks: Utilize cultural dimensions from Hofstede, Hall, Trompenaars, etc.

  • Cultural Distance: Assess psychological distances based on language, traditions, and beliefs.

  • Factors: National cultures, languages, religious beliefs, and lifestyle differences.

Political and Legal Factors

  • Types of Political Risks:

    • Systemic Risks: Risks inherent to the political system.

    • Procedural Risks: Risks related to processes that affect operations.

    • Catastrophic Risks: Extreme events that pose significant threats.

    • Distributive Risks: Risks related to the distribution of resources and profits.

Economic Factors

  • Systems of Economy: Identify the economic structure (market, mixed, command).

  • Economic Performance: Analyze various indicators such as GDP, GNI, and inflation rates.

  • Economic Environment: Determine market size and growth potential, and understand trading blocs.

Detailed Economic Analysis

  • Key Indicators:

    • GNI per Capita, GDP per Capita

    • Unemployment Rates and Inflation

    • National Development Indicators (HDI, YBLI, HPI, GCI, WCI, GII)

    • Assess these indicators to gauge economic conditions in candidate countries.

Detailed Analysis Framework

  • Competition and Market Dynamics: Understand the extent of competition, potential distributors, and partners relevant to the target country.

  • Labour Laws: Evaluate regulations affecting the workforce in the target countries.

Country Risk Framework

  • Shareholders' Exposure: Risks related to asset destruction, spoliation, and immobility.

  • Economic Risks: Monitor economic growth, inflation, and exchange rate stability.

  • Political Risks: Evaluate risks associated with political stability and regulatory environments.

  • Operational Risks: Analyze infrastructure and market disruption risks that could impact business operations.

Evaluating Country Tools

  • Country Comparison Tools: Utilize grids and matrices for systematic country assessment.

    • Rank countries based on various factors and assign weights to important variables.

    • Create a scoring system to facilitate objective evaluations.

Structure of Reports

Assignment Components:

  • Cover Page: Clear details including name, student number, tutor name, and assignment title.

  • Table of Contents: Automatically generated using headings.

  • Main Body: Must include comprehensive research and analysis relevant to assignment topics.

  • Conclusion: Summarize key findings and recommended strategies, highlighting the best entry modes and countries.

  • References and Appendices: Include a properly formatted reference list and supporting information in appendices as necessary.

Achieving High Marks

Key Focus Areas:

  • Theory and Application: Demonstrate application of theory to relevant data analysis.

  • Professional Presentation: Ensure a clean and professional layout of reports with correct referencing to enhance readability.

  • Analysis Over Description: Focus on critical evaluation rather than mere description, providing relevant examples and insights.