Seeing that the Market Potential Indicator (MPI) must provide a precise analysis of the opportunities that a certain market has for an average company, the need to incorporate not only basic economic factors but also the ones concerning the population of the market in question, the commercial infrastructure, etc., into the development of the MPI emerges. According to the information provided by the MPI developers, eight key indicators were used in designing the tool. Particularly, market size, intensity, growth rate, capacity, and receptivity, as well as commercial infrastructure, economic freedom, and country risk (Market Potential Indicator, 2015) must be mentioned. The dimensions of the target market help identify the approach that a company needs to undertake in order to find its niche in the given economic environment. The demographics of the market is an especially important factor, as it determines the advertising tools and the marketing strategy to be used in order to cater to the needs of the target population (Daniels, Radebaugh, & Sullivan, 2011). The commercial infrastructure and the economic freedom rates, in their turn, define the pace of the company’s progress. Finally, country risk defines the chances for a company to survive within a specific economic environment.
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Factors Affecting a Laptop Company
A company producing and selling laptops is primarily interested in the average annual income of the market demographics since a laptop is a rather expensive piece of equipment. Therefore, it is essential for an organization selling laptops to identify the consumption capacity of the market that the organization is trying to enter. Allowing the location of both the average annual income share of a middle-class family (Market Potential Indicator, 2015) and the rates of consumer expenditure within the specified market, consumption capacity is a crucial factor in the choice of a market for a laptop company.
Another important parameter, the market receptivity of the target economic environment, is to be added to the analysis. Helping learn the per capita imports from the U.S. to the market in question (Market Potential Indicator, 2015), this factor displays the chances for the laptop company to reach success and sell the number of laptops required for gaining the planned revenue. Specifically, market receptivity may point at the product saturation rates within the target market and identify the possible competitors.
Finally, the market size is also of great significance for a firm producing laptops. As long as the number of target customers remains high, the organization will be capable of keeping its income high.
MPI Analysis for a Laptop Company
As far as a perfect country for the company under analysis to enter is concerned, the MPI tool suggests that the French laptop market should be viewed as an option. Though the state is technologically advanced, its laptop market has not yet experienced the pinnacle of its saturation yet based on the market receptivity rates (Market Potential Indicator, 2015). Moreover, the size of the market is quite large; the rate reaching 10 (Market Potential Indicator, 2015). While one might argue that there are states with greater market size scores, France is one of the few states that have their market size and receptivity comparatively high (10 and 12 correspondingly) (MPI data, 2015). Moreover, the consumption capacity of the target market reaches 72, which is another impressive score. Therefore, France should be viewed as an option for a company producing and selling laptops.
Daniels, J., Radebaugh, L., & Sullivan, D. (2011). The economic environments facing business. In J. Daniels, L. Radebaugh, & D. Sullivan, International business (pp. 131–174). 13th ed. Upper Saddle River, NJ: Pearson.
Market Potential Indicator. (2015). Michigan State University. Web.
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MPI data. (2015). Michigan State University. Web.