INTERNATIONAL

EXPANSION AND GLOBAL

MARKET OPPORTUNITY
ASSESSMENT
PRESENTED BY :
GUISIC, JASMINE MAE C.
LIM, KIM JOSIAH S.
LOCRE, MICHAEL ANGELU
MATA, JEMAROSE R.
MIRANDA, ANGEL ANN A.
MISOLAS, BRIANA SOFIA F.
TABLE OF CONTENT
GLOBAL STRATEGIC CAGE ANALYSIS
01 CHOICES 04
PESTEL, SCENARIO PLANNING
02 GLOBALIZATION,
AND IMPORTING
05 AND ANALYSIS

INTERNATIONAL-
03 EXPANSION ENTRY
MODES
GLOBAL STRATEGIC
CHOICES
The Why, Where,
and How of
International
Expansion
RATIONALE FOR INTERNATIONAL
EXPANSION
Companies embark on an expansion strategy for one or more of the
following reasons:
• To improve the cost-effectiveness of their operations
• To expand into new markets for new customers
• To follow global customers
HOW TO ANALYZE AND EVALUATE MARKETS FOR
INTERNATIONAL EXPANSION
PLANNING FOR REGIONAL DIFFERENCES
INTERNATIONAL EXPANSION The next part of due diligence
As companies look for growth is to understand the regional
in new areas of the world, they differences within the country
typically prioritize which and to not view the country as
countries to enter. a monolith.

INTERNATIONAL MARKET UNDERSTANDING LOCAL

DUE DILIGENCE CONSUMERS
Involves analyzing foreign Entering a market means
markets for their potential size, understanding the local
accessibility, cost of consumers and what they look
operations, and buyer needs for when making a purchase
and practices to aid the decision. In some markets,
company in deciding whether price is an important issue.
to invest in entering that
market.
HOW TO ANALYZE AND EVALUATE MARKETS FOR
INTERNATIONAL EXPANSION
HOW TO LEARN THE DIFFERENTIATION AND
NEEDS OF A NEW FOREIGN CAPABILITY
MARKET When entering a new market,
companies also need to think
The best way for a company to
critically about how their
learn the needs of a new
products and services will be
market is to deploy people to
different from what
immerse themselves in that
competitors are already
market.
offering in the market so that
INDUSTRY DYNAMICS the new offering provides
customers value.
In some cases, the decision to
enter a new market will
• Corporate fit - the degree to
depend on the specific
which the company's existing
circumstances of the industry
practices, resources and
in which the company
capabilities fit the new market.
operates.
PESTEL, GLOBALIZATION,
AND IMPORTING
COMPONENTS OF
PESTEL ANALYSIS
PESTEL ANALYSIS
an important and widely used tool that
helps show the big picture of a firm’s
external environment, particularly as
related to foreign markets.

an acronym for the political, economic,

sociocultural, technological,
environmental, and legal contexts in
which a firm operates

helps managers gain a better

understanding of the opportunities and
threats they face

provides insight into the status of key

market flatteners, both in terms of their
present state and future trends.
3 STEPS IN THE
PESTEL ANALYSIS
consider the relevance of each of the
01 festival PESTEL factors in your context.
identify and categorize the
02 information that applies to these
factors.

analyze the data and draw

03 conclusions
PESTEL ANALYSIS
PESTEL ANALYSIS
POLITICAL
Understand how government policies and trade
agreements impact business.

Example: Political stability and taxation policies.

ECONOMIC
Analyze the country's economic conditions like
inflation, interest rates, and employment levels.

Example: A country with high inflation might

increase operational costs.
PESTEL ANALYSIS
SOCIOCULTURAL
Look at cultural aspects such as religion, lifestyle, and
education levels.

Example: Adapting products to fit local customs or

values.

TECHNOLOGICAL
Assess the technology level, innovation, and
intellectual property protection in the country.

Example: Markets with advanced tech may provide

opportunities for e-commerce.
PESTEL ANALYSIS
ENVIRONMENTAL
Focus on environmental issues and regulations like
waste management and sustainability.

Example: Stricter laws on emissions might affect

operations.

LEGAL
Check laws regarding employment, product safety,
and intellectual property rights.

Example: Legal disputes can arise if intellectual

property isn't well-protected.
 POLITICAL FACTORS
Political factors affect consumer confidence and
consumer and business spending. Government
policies on regulation and taxation can vary from
state to state and across national boundaries.

ECONOMIC FACTORS
Managers also need to consider macroeconomic
factors that will have near-term and long-term
effects on the success of their strategy. Inflation rates,
interest rates, tariffs, the growth of the local and
foreign national economies, and exchange rates are
critical.
 SOCIOCULTURAL FACTORS
The social and cultural influences on business vary from
country to country. Depending on the type of business,
factors such as the local languages, the dominant religions,
the cultural views toward leisure time, and the age and
lifespan demographics may be critical.

TECHNOLOGICAL FACTORS
Technological factors have a major bearing on the threats
and opportunities firms encounter. New technology may
also provide the opportunity for more innovative products
and services, such as online stock trading and remote
working. Such changes have the potential to change the
face of the business landscape.
 ENVIRONMENTAL FACTORS
The environment has long been a factor in firm strategy,
primarily from the standpoint of access to raw
materials. Increasingly, this factor is best viewed as both
a direct and indirect cost for the firm.

LEGAL FACTORS
Finally, legal factors reflect the laws and regulations
relevant to the region and the organization. Legal factors
can include whether the rule of law is well established,
how easily or quickly laws and regulations may change,
and what the costs of regulatory compliance are
PESTEL AND GLOBALIZATION
FACTORS FAVORING INDUSTRY GLOBALIZATION
1. MARKETS
◦ Homogeneous customer needs
◦ Global customer needs
◦ Global channels
◦ Transferable marketing approaches

2. COSTS
◦ Large-scale and large-scope economies
◦ Learning and experience
◦ Sourcing efficiencies
◦ Favorable logistics
◦ Arbitrage opportunities
◦ High research-and-development (R&D) costs
PESTEL AND GLOBALIZATION
FACTORS FAVORING INDUSTRY GLOBALIZATION

3. Governments
◦ Favorable trade policies
◦ Common technological standards
◦ Common manufacturing and marketing
regulations

4. Competition
◦ Interdependent countries
◦ Global competitorsAdapted from Michael E.
Porter, Competition in Global Industries (Boston:
Harvard Business School Press, 1986); George S.
Yip, “Global Strategy in a World of Nations,” Sloan
Management Review 31, no. 1 (1989): 29–40.
 Importing as a Stealth Form of
Internationalization
Importing plays a pivotal role in
globalization, serving as an indirect
form of internationalization for firms
that may not explicitly identify as
global businesses. Here’s an in-
depth explanation of why importing
is considered a "stealth form of
internationalization" and its
implications:
Outsourcing occurs when a
company contracts with a third
party to do some work on its
behalf.
Offshoring occurs when you take
a function out of your country of
residence to be performed in
another country, generally at a
lower cost

International outsourcing, or
outsourcing work to a
nondomestic third party, has
become very visible in business
and corporate strategy in recent
years.
INTERNATIONAL-EXPANSION ENTRY MODES
THE FIVE COMMON INTERNATIONAL-EXPANSION ENTRY MODES
CAGE ANALSIS
SEQUENCE OF REPORT

01 CAGE ANALYSIS DEFINE

02 GENERAL GUIDELINES

03 DETAILED EXAMPLE

04 LIMITATIONS
CAGE ANALYSIS
also known as Distance Framework
developed by: Pankaj Ghemawat
- Indian American Business professor and economics

CULTURAL ADMINISTRATIVE GEOGRAPHIC ECONOMIC

DISTANCE DISTANCE DISTANCE DISTANCE

-differences in
-differences in political -relates to physical - differences in
language,religion,social
norms and values and legal system, proximity, income levels,
between the home government regulations transportation cost currency exchange
country and the target and policies between and time zones
country
rates and business
countries between countries practics
Ex. Mc Donald's not offering beef
Ex. Company Facebook and Ex. Imagine a small restaurant in Ex. Luxury Brand like Louis
burger in India due to cultural Naga City that specializes in
Google is facing challenges in Vuitton set higher price for their
dietary preferences. Bicolano cuisine. The restaurant product in high income country
China due to government
owner wants to understand the and may adjust their pricing
restriction on Internet content potential competition from strategy in emerging market
and sensorship. other restaurants in the region. with lower income countries.
GENERAL GUIDELINES
APPLYING CAGE ANALYSIS
MEASURE DISTANCE DEVELOP ADAPTIVE
01 AND PRIORITIZE 04 STRATEGY
COLLECT MONITOR, ADJUST ,AND
02 COMPREHENSIVE DATA 05 SEEK EXPERT ADVICE

EVALUATE IMPACTS
03 AND TRADE OFFS
DETAILED EXAMPLE:
DETAILED EXAMPLE:
DETAILED EXAMPLE:
LIMITATIONS:
SCENARIO PLANNING
AND ANALYSIS
THE HISTORY AND ROLE OF
SCENARIO PLANNING AND ANALYSIS
Strategic leaders use the information revealed by the
application of PESTEL analysis, global dimensions, and CAGE
analysis to uncover what the traditional SWOT framework
calls opportunities and threats.

However, a SWOT assessment works best with one situation

or scenario and provides little direction when you’re
uncertain about potential changes to critical features of the
scenario.
SCENARIO
PLANNING
Scenario planning helps leaders
develop a detailed, internally
consistent picture of a range of
plausible outcomes as an
industry evolves over time.

GOAL/PURPOSE
To provide a broader perspective
on trends and uncertainties.
DRIVING FORCES FOR CHANGE:
TRENDS AND UNCERTAINTIES
TRENDS UNCERTAINTIES
Trends are forces for Uncertainties—forces for
change whose direction— change whose direction
and sometimes timing— and pace are largely
can be predicted. unknown.
SIX BASIC STEPS OF
SCENARIO PLANNING
Choose the target issue, Detail the four quadrants
01 04
scope and time frame that
the scenario will explore.
of the scenarios with
stories.

Brainstorm a set of key Identify indicators that

02 drivers and decision

factors that influence the
05 could signal which
scenario is unfolding.
scenario.
Assess the strategic

03 Define the two

dimensions of greatest
06 implications of each
scenario.
uncertainty.
THANK YOU
LET’S HAVE
A QUIZ!
1
TRUE OR FALSE
The four dimensions of Cage Analysis are
cultural, administrative, geographic, and
economic or distance framework.
2

What are the key factors in

Scenario Planning?
3

Give one reason why companies

embark on an expansion strategy.
4
It helps leaders develop a detailed,
internally consistent picture of a range of
plausible outcomes as an industry
evolves over time.
5

Who developed Cage Analysis?

6
It occurs when you take a function
out of your country of residence to
be performed in another country,
generally at a lower cost.
7

The degree to which the company's

existing practices, resources and
capabilities fit the new market.
8-9

Give at least 2 among the five

common international expansion
entry modes.
10

What are the six factors considered

in a PESTEL Analysis?
 1. TRUE
A 2. Uncertainties
3. • To improve the cost-effectiveness of their operations
N • To expand into new markets for new customers
• To follow global customers
S 4. Scenario Planning
5. Pankaj Ghemawat
6. Offshoring
W 7. Corporate Fit
8-9. • Exporting
E • Licensing and Franchising
• Partnership and Strategic Alliance
R • Acquisition
• Greenfield Venture
S 10. Political, Economic, Sociocultural, Technological,
Environmental, Legal