Situation Analysis

Global Business GUIDELINES FOR CASE ANALYSIS IBA 555

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STEP 1. Situation Analysis
A. Political Factors
What type of political system is operating in the countries the firm(s) are presently in? In the
country they are considering to enter?
What conflicts, if any, do you expect the firm to have because of this?
What is the current political stability of the targeted country? What factors have contributed to
the stability or instability? Are there efforts to change this? If so, what are they?
What type of legal system (e.g., common law, civil law) is in place? What challenges or
opportunities does this present?
What efforts are being made by the government to increase Foreign Direct Investment?
B. Social & Cultural Factors
What social and cultural factors may be of benefit or challenge to the firm entering the
targeted countries? Address:
Values, norms, folkways, and mores
Religious influences
Education
Language effects
Hofstede characteristics
Social Mobility
Gender roles and gender equality
Class systems
C. Competitive Position
What is the current environment within the targeted country that helps or hinders
competition?
Address the nature of property rights and the presence of corruption.
Are product safety standards and laws different in targeted nations from the home
nation?
What about product liability?
What reforms is government proposing to increase competition in the targeted country?
What cultural factors help or hinder competition within the targeted country?
What competences must each firm possess to develop a competitive advantage and to
sustain that advantage within the targeted country?
What resources are available in the targeted country that enhances/hinders its
competitive position? Include education of the population, cultural factors, wages,
infrastructure, market need, etc.
D. Market Analysis
First, focus on the industry's customer. Remember the many different roles played in the buying
situation (e.g., decision maker, buyer, user, etc.). Discuss who plays these roles and the complexity of the

Global Business Guidelines for Case Analysis IBA 555

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buying process. Address:
Key Factors in the Purchase Decision
Estimated annual purchases
Projected annual growth rate
Customer Complexity
Geographic constraints/implications
Complexity of Purchase
Financing required?
Price sensitivity
Quality sensitivity?
Who serves the key markets?
Value Proposition. Articulate what the organization’s value proposition(s) are for the segment(s) of
customers they intend to serve.
E. Economic Factors
Country – Does the country follow a command or market-based approach to the economy?
Address:
Gross National Income
Gross National Income per Capita
Purchasing Power Parity
Human Development Index
Extent/prevalence of innovation and entrepreneurship
Prevalence of Privatization/Nationalization
Regulatory Environment

Regional – Address any issues regarding the global region that targeted markets exist in.
Monetary – Address any issues the target country faces with their monetary systems that
would be challenges for the firm. Include currency, banking availability, etc.
Other – Address any other issues related to economic factors
F. Strategic Issues
Technology and Production – What challenges and opportunities does the targeted country face
in terms of manufacturing, resources, adoption of technologies, etc.?
Logistic/Supply Chain – Discuss challenges and opportunities that are faced for operations in the
targeted country to send and receive raw materials, component parts, and finished product.
Human Resources – Discuss the sophistication, preparedness, education, attitudes, etc. of the
work force in the targeted country.