GMS 724 Chapter 11: Country Evaluation and Selection.docx

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 724
• Professor: Jim Everard

Document Summary

When making country selection decisions companies must consider: where to locate sales, production, and administrative and auxiliary services, the sequence for entering different countries, the portion of resources and efforts to allocate to each country where they operate. Figure 3: the location-decision process: decision-making process is two-fold. Comparing them with the company"s objectives and capabilities. Managers use scanning techniques to examine and compare countries on broad indicators of opportunities and risks. Without scanning a company may: overlook opportunities and risks, examine too many or too few possibilities. Step 1: scanning: comparing country information that is readily available, inexpensive, and fairly comparable. This is known as an escalation of commitment. The expectation of a large market and sales growth is probably a potential location"s major attraction. Companies undertake international business to secure resources that are either too expensive or not sufficiently available in their home countries: buy resources from another organization, or establish foreign investments to exploit them.