Foreign Market Assessment Section

This is the second stage of assessing the foreign market where focus is laid on financial and economic conditions of the country. However, Import Export Education can you help you understand this subject on a much better scale.

Secondary Screening (Financial and Economic Situations)

Secondary screening includes financial and economic situations such as trends in price rise, interest rates, exchange-rate stability, and scope of credit and financing. Nations with high inflation rates (as well as strict and cheap interest rates) should be attentively considered because they might limit the volume of imports by limiting the scope of foreign exchange.There is also a requirement to cross check the availability of financing banks that can finance international transactions and manage collections, payments, and monetary transfers.Economic information are also utilized to measure specific indicators such as size of the market (relative size of every market as percentage of total global market), market intensity (level of purchasing power), and development of the market (annual increase in the sales). Nations with forward economies account for a huge percentage of the global market for auto-mobiles, desktops, and televisions. Their high per capita incomes mirror the magnetism of the market and the level of purchasing power.Such data will aid in choosing nations with rapidly growing markets and high combinations of purchasing power.

Third Screening (Political and Legal Factors)

It is crucial to assess the kind of government (democratic/nondemocratic)and its balance. Nations with democratic rules tend to be politically resistant and favor open business polices, and are less likely to resort to measures that limit the imports or hinder companies’abilities to take specific actions. Political imbalance may also lead to loss to property and/or division of sellers or sales. It could be as an out come of wars, rebels,takeover of property, and/or modification of rules. Consideration should also be laid to legal factors in these nations that affect export/import performances.

These consist of the following:

Entry obstacles: Product limitations, huge import tariffs, limited quotas,import licenses, certain taxes on imports, product tagging, and other limited trade laws.

Restrictions on reward remittances and/or ownership: Imposition of stringent limits on capital outflows in international currencies, limitations on or delays in remittance of rewards, and ownership needs to establish a trade.

Taxes and price disciplines and security of intellectual property rights:The presence of high taxes, price controls, and absence of enough protection for intellectual property rights should be regarded.

In section- 3 i.e. the last part of this topic, we will understand about the other miscellaneous factors to consider while assessing the international market. Get Import Export Education at iiiEM.

Report this Page