Building the Knowledge Base

Prof. Rushen Chahal

Prof. Rushen Chahal

Learning Outcomes


 

To gain an understanding of the need for research and types of information that may be useful To learn where to find and how to use sources of secondary information To understand how to gather primary information To appreciate the importance of international information systems and their requirements

Prof. Rushen Chahal

The Need for Research



Before trading internationally, managers need to prepare and gather sufficient information Necessary information may include:

Cultural differences Political policy and legal restrictions The existence of a viable market Economic trends Infrastructure status
Prof. Rushen Chahal

The Need for Research (Cont.)



Research should allow a manager to identify and develop international strategies Tasks include:

Identification of potential international business opportunities Evaluation of options Comparison of potential international business opportunities Selection of the foreign target market Using information to develop a plan for market entry, market penetration and expansion
Prof. Rushen Chahal

First Step of Going International: Determining Objectives



Management should undertake an analysis of the readiness of the business to go international Considerations include:

Mission statement Existing level of internationalization Competitive situation (Industry) Internal capabilities
Prof. Rushen Chahal

Second Step of Going International: Gathering and Using Information

    

Foreign Market Opportunity Analysis should be a quick and low cost approach Look at big picture country variables, like GDP; population and other demographic factors Gather information on countries for the industry and market segments Then, select specific countries for in depth analysis of the market for a product, service or brand and demand Finally, a competitive assessment must be made to determine if the company has the ability to compete in the market
Prof. Rushen Chahal

Where to Find Information: What Information is needed?



Macro Data

Micro Data

Tariff information Export/Import Data Nontariff restrictions Government Trade Policy

Local laws and regulations Size of the market Local standards and specifications Distribution system Competitive activity (Industry)

Prof. Rushen Chahal

Where to Find Information: Secondary Data

 

The internet is the quickest and easiest way to find secondary data Data can be found from:

Governments (For example, U.S. trade data can be found at www.trade.gov) International Organizations
   

WTO at www.wto.org United Nations Conference on Trade and Development at www.unctad.org The World Bank at www.worldbank.org The International Monetary Fund at www.imf.org
Prof. Rushen Chahal

Where to Find Information: Secondary Data (Cont.)

Service Organizations (for example, freight forwarders or research firms) Trade Associations (for example, in Beijing there is an American Chamber of Commerce) Newsletters Electronic Information Services

Prof. Rushen Chahal

Samples

All are free and may be used for educational purposes

Prof. Rushen Chahal

Prof. Rushen Chahal

Evaluation of Secondary Data



Be sure to pay attention to:

Quality of the source Recency Relevance to the research task

Prof. Rushen Chahal

Interpretation and Analysis of Secondary Data



Secondary data is not compiled with the particular research in mind The research must analyze and interpret the information for the task at hand Sometimes secondary data can be a proxy for data the researcher needs

Prof. Rushen Chahal

Where to Find Information: Primary Research



Sometimes primary research is necessary to fill in the gaps Primary research is used to answer specific questions, like:

How much does the typical American consumer spend on fast food? What level of quality do American consumers expect?
Prof. Rushen Chahal

Where to Find Information: Qualitative Types of Primary Research Techniques



Interviews

Advantages: individuals may have specific, valuable knowledge about the foreign market Disadvantages: bias

Focus Groups (a small group of knowledgeable people discusses a topic)

Advantages: Discussion may bring out underlying issues Disadvantages: Highly dependent on the group leader; bias; cultural issues

Observation
Prof. Rushen Chahal

Where to Find Information: Quantitative Types of Primary Research Techniques



Surveys

Advantages: a relatively easy and useful way to obtain data Disadvantages: resentment Advantages: detailed tracking of consumer interests Disadvantages: Doesnt work well in markets with low penetration of internet; privacy issues
Prof. Rushen Chahal

Web Technology

International Information Systems



Information system systematic and continuous gathering, analysis and reporting of data for decision-making purposes Information system must be:

Relevant Timely Flexible Accurate Exhaustive Consistent Convenient

Prof. Rushen Chahal