Evaluating Economic Disparities for Market Entry PPT

This PPT slide, part of the 32-slide CAGE Distance Framework PowerPoint presentation, outlines the fourth step in the CAGE Distance Framework, focusing on assessing economic distance. The primary goal is to identify economic disparities between the home country and the target market that could impact market size, consumer purchasing power, and overall business viability.

Four key actions are highlighted for effective assessment. First, researching average income levels and purchasing power in the target market is essential. This helps gauge potential demand for products or services. Second, assessing the target market's size and growth prospects is crucial, with an emphasis on demographic trends and industry-specific opportunities. Third, comparing cost structures—such as labor, production, and operational costs—between the target market and the home country allows for the identification of cost advantages or disadvantages. Lastly, analyzing local currency stability and potential exchange rate risks is vital. Developing strategies to manage how these fluctuations might affect pricing and profitability is necessary for informed decision-making.

An example provided illustrates a luxury brand considering expansion into Brazil. The brand must navigate the country's high income inequality, which necessitates a dual strategy that caters to both affluent consumers and the broader market with more affordable options. This example underscores the importance of tailoring strategies to local economic conditions.

Overall, this slide serves as a guide for organizations aiming to understand the economic factors that influence international market entry. By following these steps, businesses can better navigate the complexities of entering new markets and enhance their strategic planning.

This slide is part of the CAGE Distance Framework PowerPoint presentation.

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