Data Collection for Decision Making
Understanding the economic and political environments of three different countries will help predetermine the success of a product’s entry into the market. Such analytics will minimize the risks of product buyers’ non-acceptance when choosing geographic diversification.
The political system is expected to influence legislation and determine the necessary market entry strategy (Ahlers et al., 2021). For example, democratic regimes will be more supportive of adopting new products. The type of economy will allow one to assess the preliminary success. Economic blocks and buying behavior will indicate how easy it will be to organize trade from a legal and logistical view, as well as the popularity of certain products among the population (Smale, 2020). Overall GDP and GDP per capita will indicate the prosperity of the economy and its ability to attract external inputs of products (Horak et al., 2020).
All data points should be given equal weight, as this minimizes the risks as much as possible. The ideal data for entering a new market include a political system close to local, such as a democratic federal republic, a high GDP that reinforces the solvency of the population, and similar economic blocs.
Data Analysis
Insights:
- The political system allows business professionals to understand that the easiest country to enter, Japan, can be difficult due to the monarchy and high level of power.
- The economy should be market-based for optimal entry into the country’s market, but a mixed economy, similar to those of Mexico and Germany, may also be suitable.
- Economic blocs demonstrate the ease of trade logistics and legal aspects; Germany remains the best option for the US due to its membership in the European Union.
- GDP measures a country’s economic success and people’s willingness to buy, and Germany and Japan remain viable options.
- Purchasing power measures whether buyers in a particular country have the means to buy new products, and Germany is the country with the best purchasing power.
- GDP per capita measures the well-being of its citizens, and Germany is one of the most prosperous countries.
Appropriateness of Introducing the Product into the Three Markets
Germany will be the most profitable market for a new product. Japan is middle, and Mexico remains the least profitable country to enter. First, attention was paid to the population’s purchasing power. For example, despite having the largest GDP, Japan has the lowest purchasing power (Macrotrends, 2021b). Mexico has the lowest purchasing power and GDP, placing it last on the list (Macrotrends, 2021c).
Next, the type of economic system was evaluated, and the free market in Japan would be the most profitable option, provided one does not consider purchasing power. Information about the political regime also proved crucial, and the monarchical structure, which differed significantly from the system in the United States, placed Japan in second place.
Finally, it is essential to consider the trade and economic blocs to which countries belong. Since Germany is in the EU, it can be the most profitable, as the US has close ties and trade arrangements with Europe (Smale, 2020). Mexico would also be beneficial due to the location and logistics, but this may not be the most critical factor. Thus, by combining political and economic factors, it becomes possible to determine Germany as the most profitable country for releasing a new product.
References
Ahlers, A. L., Krichewsky, D., Moser, E., & Stichweh, R. (2021). Democratic and authoritarian political systems in 21st century world society: Differentiation, inclusion, responsiveness. Transcript Verlag.
Horak, J., Vrbka, J., Suler, P. & Ashmarina, S.I. (eds.) (2020). Economic systems in the new era: Stable systems in an unstable world. Springer International Publishing.
Macrotrends. (2021a). Germany GDP Per Capita 1970-2023. Countries. Web.
Macrotrends. (2021b). Japan GDP Per Capita 1960-2020. Countries. Web.
Macrotrends. (2021c). Mexico GDP Per Capita 1960-2023. Countries. Web.
Smale, B. (2020). Exploring trade union identities: Union identity, niche identity and the problem of organizing the unorganized. Bristol University Press.