For growth to be optimal, management must first be able to identify the most prospective leads. The country (in which a venture may take place) as a whole, specifically geography, government, and financial aspects must be looked at in order to yield the best possible picture of the market that the company wishes to enter. Concentration should be placed on gathering reliable facts that are backed up by more than one source. It would be desirable that after creating this picture of the market in the foreign country, senior management’s analysis would avoid any possible losses. Success of the multinational corporation lies on the shoulders of it’s management.
Top management’s responsibility at and beyond the organization’s boundaries is largely a communication responsibility. Within even some of the largest and most venerable organizations, the process used is inconsistent. CEOs must establish and reinforce an organization’s image in the public eye by viewing each target Viewing the public as a client would lead to doing a lot of research consisting of looking at trends, and talking to experts. A CEO focuses on selling what the client wants to buy. Finding a country to conduct business in can be a very easy task or a very difficult one depending on if the organization’s top management executes its plans adequately.
The way a company normally discovers where to conduct research is through leads on potential operations from outside sources. The selection of which leads to investigate becomes the difficult task. After sifting through the leads and finding the right ones to investigate, management must formulate an international marketing plan. This further helps management in locating potential markets for their products.
The first step is to use secondary research to find out what the sales potential is in a given market. Asking the questions of need, demand, and support gives one a starting point for research. If we were a company that sold pants we might want to ask the following questions. Is there a need for pants? Is it cold enough there to wear pants? Do people that demand the pants have money? These are the questions that one should ask of potential markets. After gathering the information from the secondary research, the picture of a potential market becomes more evident. However, to make the picture clearer, one must conduct primary research.
This research outlines the specifics of the potential market that directly pertains to the product. After finding a lead that contains profitable markets it is necessary to analyze the venture as a whole. The decisions of companies must be based on the facts of reliable sources on all investments. To gather the information needed for investment projects, management must organize a competent feasibility team. The members of this team should be comprised of employees of the company, this is so that the knowledge will stay within the company.
If the resources are not available for an employee conducted study then outside consultants may be used, it may also be beneficial to use a combination of the two. The first step in conducting a study is to design it by using project objectives as the base. During the second step the team must be staffed with people that have the ability to solve problems in any situation. In the third step the team should be properly placed and instructed. In the fourth and final step the product of the feasibility study should be properly communicated to senior management. The design of a feasibility study first assumes that a company possesses the skills and resources necessary to be competitive in the market under analysis.
Management must know the limits of its operations abroad. The operating margin for the expense of establishing and starting operations abroad should be easily recoverable within a reasonable time period. The design should also include the management’s goals, which comes down .