Short Paper: Market Potential Indicator - Essay Example

Another indicator in this section is the level of electricity consumption. It is necessary to note that electricity is an important infrastructural aspect that makes it possible for any machine to operate or possibly run an industry installed. The rate of growth of a market puts in place several aspects. The reasons for an increased growth rate or lack of it mean that a company has to consider whether to invest in the market or not. Growth rate is measured by the rate of GDP growth rate and the actual growth in the use of primary energy.

There are installations that can never work as an industry without efficient availability of a primary supply of energy (Global Edge, 2013). The weight of the market intensity is important in creation of a favorable environment for operation. Market intensity is considerate of two factors; private consumption as related to GDP and Gross national Income (GNI) per capita. This is because a higher per capita income indicates higher purchasing power parity (PPP) of the population. Expressing Per capita income as a percentage of the GDP helps understand the income distribution of individuals in the economy.

Very high disparities in income distribution can also be known so that an investment may not be made in an area having a population with a low PPP. The consumption capacity of the market strategically represents the percentage share of the middle income earners in the consumption level. This is because in the emerging markets, middle income earners are the majority and therefore a higher index would mean that the consumption capacity is high. According to Kvint (2010) the commercial structure is the most important factor that determines the investment index.

A high index scored in a country’s infrastructure brings out the idea that a company wishing to invest will not incur extreme costs in establishment of the infrastructure around it and in the market