What are the three basic criteria for assessing opportunity in global target markets?
What will be an ideal response?
The three basic criteria for assessing opportunity in global target markets include the current size of the segment and anticipated growth potential, competition, and compatibility with the company's overall objectives and the feasibility of successfully reaching a designated target.
(1 ) Current Segment Size and Growth Potential: A company should consider whether a market segment is currently large enough to present the company with the opportunity to make a profit. If it is not large enough or profitable enough today, the company should make sure that it has high growth potential so that it is attractive in terms of its long-term strategy.
(2 ) Potential Competition: A market or market segment characterized by strong competition may be a segment to avoid or one in which to utilize a different strategy. Often a local brand may present competition to the entering multinational.
(3 ) Compatibility and Feasibility: If a global target market is judged to be large enough, and if strong competitors are either absent or not deemed to represent insurmountable obstacles, then the final consideration is whether a company can and should target that market. In many cases, reaching global market segments requires considerable resources, such as expenditures for distribution and travel by company personnel. Another factor to be considered is whether the pursuit of a particular segment is compatible with the company's overall goals and established sources of competitive advantage.
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