Analysing Global & Domestic Markets
A good decision is based on knowledge, not numbers.
Plato (424-348BC), Athenian philosopher.
In this chapter, we broadly balance the content between discussions of academic theories and debates with laundry-list information requirements which are essential for crafting global and domestic business strategies based on complex information. We also provide models and practical frameworks designed to harness this quality information to improve company performance.
We compare and contrast the nature of established versus emerging markets alongside a consideration of the strategic challenges associated with each. In the first instance, we address some definitional issues which suggest that the universe of global markets (and therefore market analysis) has developed layers of complexity previously unknown and which therefore require clarification.
Until the late 1990s, international business textbooks and publications from research institutions such as The Economist Intelligence Unit (EIU) and the compilers of the Business Environment Risk Index (BERI) used ‘macro’ country classification identifiers based upon the following categories:
- Less ‘Developed’ Countries (LDCs), for example: most African countries; most South American countries; Bangladesh; Pakistan; parts (regions) of China; parts (regions) of India.
- Newly Industrialising Countries, for example: Egypt; Indonesia; Malaysia; Philippines; Thailand; Vietnam; parts (regions/cities) of China; parts (regions/cities) of India; countries of South America (e.g. Chile); countries of Africa (e.g. Kenya, Morocco, Nigeria).
- Newly Industrialised Countries (NICs), for example: Hong Kong; Singapore; South Korea; Taiwan; Turkey; parts (regions/cities) of China; parts (coastal regions/cities) of India; countries of South America (e.g. Argentina, Brazil); country of Africa (South Africa).
- Advanced Industrialised Countries (AICs), for example: G7 (Canada, France, Germany, Italy, Japan, UK, USA); Benelux (Belgium, Netherlands, Luxemburg); Nordic (Denmark, Finland, Norway, Sweden); ANZAC (Australia, New Zealand); Ireland; Greece; Portugal; Spain; Switzerland; and others.
As can be seen, the classification had evolved into something very messy: any categorisation which can have the same ‘line-item’ in more than one category is weak. Also, please note the inverted commas around ‘developed’ in the LDC category. This reveals the classification for what it was: purely rooted in economics and the somewhat arbitrary metrics of degrees of industrialisation and income levels (GDP per capita); no one would suggest that the diverse countries of Africa were less developed culturally than, for example, Taiwan. Many rich, non-industrialised countries also don’t feature, for example, Saudia Arabia, UAE, Qatar etc., blessed with the land-luck of oil and now exploring development options for a post-fossil fuel, post-industrial era.
A new category of countries had to be accounted for from the early 1990s onwards in the wake of the collapse of the USSR and the related freedom of its vassal states in Central and Eastern Europe and elsewhere.
Another complicating factor was the rapid emergence of new industries based upon innovative and, in many cases, ‘disruptive’ technologies. As we demonstrate, traditional thinking would suggest that rich countries would be the early adopters of these emergent technologies, a reasonable assumption intuitively but also historically factual (we’ll ignore the role of wars, empire, colonialism and mercantilism here, though these should be acknowledged). For example, in telecommunications, the development of cellular technologies rapidly penetrated countries where landline networks were primitive because the nations were historically very poor, for example, countries in Africa, South America and Southeast Asia.
This historical background is important because of the legacy it left in terms of the availability, accessibility, reliability and validity of market(s) data and information for global business strategy design. In this chapter, we profile the typical characteristics of markets and their strategic implications under two broad categories:
We provide a unique methodology for analysing country clusters, using a common process to map and understand diverse country-markets.
- Beyond data: ‘big’ or ‘small’.
- Consider the following as a continuum:
- Business Issue Identification
(opportunities, threats, key success factors).
- Business Strategy Decisions
- Business Issue Identification
- Successful mastery of these seven elements of global and domestic market analysis provides the potential for exceptional returns on international business investments.
- Risk analysis and mitigation strategies.
- Information planning and systems.
- Challenges in gathering global market data/information:
# Problems of many markets.
# Problems with existing secondary data/information.
# Problems with collecting primary data.
- Information requirements for global and domestic business strategy development:
# Demand analysis.
# Market size and growth (potential).
# Buyer behaviour and motivations.
# Role of culture on buyer behaviour.
# Value proposition adaptation requirements.
# Industry analysis (5-forces).
# Competitor analysis: global and local. Who and how many?
# General market environment.
# Political environment: government complexion and political stability.
# Local attitudes toward foreign firms.
- Competitor intelligence: anatomy of a business process.
- Organisational design for effective and efficient global and domestic market analysis.
After studying this chapter, readers will:
- Understand and unravel the complexity of country classifications.
- Have the competencies to design global business strategies based upon reliable data/information/intelligence.
- Have the capability to work strategically with third party marketing services agencies.
- Have the confidence to propose well-informed global business strategies internally.
- Apply the principles of global and domestic market(s) analysis using proven practical frameworks, methodologies, processes and tools.
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All content © Colin Edward Egan, 2021