How does a company decide which countries to target?

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  • Where to go?
    • Level of Economic development- Income levels, HDI used
      • MEASURED BY: Income (GDP) levels but often better to use HDI
        • HDI has three strands:Income, life expectancy and time spent in school (education)
    • Legal framework
      • most coutries do have sound and legal framework but they can be slow and unpredictable
        • - If some of the law enforcement agencies are corrupt-system may fail to protect foreign investors interests.
        • - without adequate legal safeguards, businesses may be reluctant to invest.
    • Government policy
      • tax regime important e.g Corporation tax also degree of Protectanism e.g high tariffs can be deterrant as can make export markets unattractive
    • Political stability and corruption
      • Need stability, not civil unrest or Wars.
        • political unrest is unattractive to businesses unless need to be there e.e Oil companies, Corruption can be a endemic in some countries.
    • Ease of setting up a business
    • Natural resources and commodity prices
    • Infrastructure
    • Language and culture

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