4.2.2 Assessing a Country as a Market

🔗 Infrastructure – The transport and communication links that enable the efficient functioning of a country. E.G Roads, water, power, etc

• Affects the transportation costs of businesses and therefore their cost competitiveness 🔗 Disposable income – Income after tax has been deducted. Determines the sales potential of a country

• Affects the purchasing power of individuals in the economy and therefore the demand for firms' goods and services.

• Also, government tax revenue helps provide financial incentives, such as subsidies, to firms.

🔗 Ease of doing business – An index that ranks countries based on how simple regulations are, e.g Tax payment mechanism, registration, construction permits

• Affects the ability of firms to carry out transactions, decisions and negotiations without much difficulty. Impacts time spent as well as financial costs. 🔗 Exchange rate – The market value of one currency against another

• Affects the cost of firms' imports as well as the competitiveness and attractiveness of their exports 🔗 Political stability – Where a country is not threatening a change of government, helping maintain consumer and business confidence

• Affects confidence in the economy, the amount of incentives available and the level of regulation imposed on businesses.

Evaluation

• The favourability of certain factors does not determine the success of a business. Own activities and decisions can still lead to business failure
• Dependent on corporate name, brand and product
• Some factors are more important to countries than others (E.G Political stability and infrastructure goods in the UK)
• Markets can change quickly subject to external shocks