Trends in Global Market Opportunities for the Year - Research Paper Example

Student ID: u3116529 Assessment Name: Research Proposal Topic: Trends in global market opportunities for the year 2017 Words: 2004 Abstract Background Companies require reliable source of information on marketing trends to determine the appropriate measures that will lead to sustainable profitability and reduced risk margins (Achten et al., 2010; Flint, 2004; Papadopoulos, Martín Martín, Papadopoulos, & Martín Martín, 2011). Business that operate in foreign markets risk collapsing due to lack of marketing intelligence. To avoid jeopardizing operations of a company, a continuous assessment of global markets is an important strategy for companies intending to invest in foreign countries where they have little or no information about (Gereffi & Frederick, 2010). Purpose of the study The general objective of this research is to evaluate trends in global marketing opportunities for the year 2017. Methodology The study adopted a cross-sectional study design whereby data was collected over a specific period to determine the views of respondents at that particular time and relied on both primary and secondary data. Data was obtained through an online survey using questionnaires that were filled by the study participants. The study a global survey conducted with a focus on 140 associations of global investors. Results 25% of the respondents ascertained that ICT solutions for global challenges would present the greatest market opportunity for global firms in 2017. This was followed by production of fresh water at 19.7% whereas smart farming contributed to 13.6% of the respondents. Majority of the respondents (20.5%) identified the unsteady energy prices as the greatest risk for global businesses in 2017. Water and food crises accounted for 13.6% while natural catastrophes as well as illicit trade both represented 10.6% of the respondents. Key words: Global market opportunity, Global market risks, Market performance Table of Contents Abstract 1 1.Background of the Problem 3 2. Objectives of the Study 4 3. Research Questions 4 4. Significance of the Study 4 5. Literature Review and Hypothesis Development 6 6. Methodology 10 7. Data analysis 11 8. Results and Discussions 12 8.1. Results 12 8.1.1. Demographic characteristics of the sample 12 8.1.2. Best performing markets in 2017 13 8.1.3. Projected Gross Domestic Product for key global markets 14 8.1.4. Global challenges requiring entrepreneurial solutions 16 8.1.5. Global Market opportunities 17 8.1.6. Global market risks 19 8.2. Test of the research hypotheses 21 8.3. Discussion 23 8.4. Answers to Research Questions 26 9. Conclusion, Implications and Recommendations 28 9.1. Conclusion 28 9.2. Implications 29 9.3. Recommendations 29 10. Limitations and future research 31 References 32 1. Background of the Problem A global market opportunity is existence of a combination of good conditions for a business to thrive such as good location, good timing, availability of resources and market niche (Startienė & Remeikienė, 2015). Companies require reliable source of information on marketing trends to determine the appropriate measures that will lead to sustainable profitability and reduced risk margins (Achten et al., 2010; Flint, 2004; Papadopoulos, Martín Martín, Papadopoulos, & Martín Martín, 2011) Business that operate in foreign markets risk collapsing due to lack of marketing intelligence. To avoid jeopardizing operations of a company, a continuous assessment of global markets is an important strategy for companies intending to invest in foreign countries where they have little or no information about (Gereffi & Frederick, 2010). When businesses expand beyond their country of origin boundaries, they look forward to exploiting new markets and making bigger profits. In addition, the internal competition from their country of origin pushes business to look for external markets where competition is lower(Gilad, 2003). International businesses face numerous risks due to highly volatile international business platforms. Investing in foreign markets requires high market intelligence, which can be gathered through surveys.Businesses are at risk of making blind foreign market marketing strategies (Ravichandran, 2010). There is inadequate information on the expected global market opportunities for the year 2017. Hence, international businesses are at a risk of facing unanticipated challenges that can wreck growth of a business or make it collapse. Conducting information search is an important marketing strategy that enables a business to make informed direction on its foreign investments (Bryman & Bell, 2015) 2. Objectives of the Study 2.1 General objective The general objective of this research is to evaluate trends in global marketing opportunities for the year 2017. 2.2 Specific objectives The specific objectives will be, 1. To determine market opportunities available for global firms in 2017 2. To identify trends in risks associated with global markets in 2017 3. Research Questions The research questions will be, 1. What opportunities will be available for global firms in 2017 2. What risks are expected in in 2017 global markets 4. Significance of the Study Expansion of markets beyond country of origin has mixed effects to businesses. There is opportunity for profit making, growth and expansion as well as probability of making loss and decline in profitability and growth of the company. The study will assess trends in market opportunities for the year 2017. Information gathered from the research will be used by global business to predict the future of their investments. Additionally, research findings will enable the corporate managers to make critical decisions concerning the strategic policies that their businesses will use. Based on the findings of this research, shareholders are likely to make their investments with a formed mind on what is likely to happen in the year 2017. It will provide vital information to companies that have intention to venture in foreign markets to gauge the benefits against risks of taking such moves. Besides, the research is seeking to gather information on possible risks to global marketing opportunities. Such information is required by businesses, governments and international businesses regulation bodies to make a contingency plan that enable them to plan ahead of facing the risks. Hence, businesses and governments can mitigate or reduce the effects of global market opportunities, which is important in enabling global businesses, navigate dynamics presented by global markets. Marketing firms will use information presented by this research to advise their clients on the best markets to invest in 2017. Marketing and business students will also use the study findings as a reference in their thesis. It will provide additional knowledge for all readers to understand the likely market opportunity trends in 2017. 5. Literature Review and Hypothesis Development Global markets present tricky situations for global businesses. Therefore, companies are required to do rely on research that predicts the future of their ventures (Sparrow, 2012). Evaluation of companies Strengths, Weaknesses, Opportunities and Threats (SWOT analysis) is essential in determining the preparedness of a company to venture in a global market. Reaching new markets provides businesses with an opportunity to tap the profits of reaching a wider market and increasing consumption of its commodities. In underserved markets, new entrants have an opportunity to make superfluous profits and excelling in global markets(Gereffi, Humphrey, & Sturgeon, 2005). Investors are likely to invest in rapidly expanding markets than shrinking markets. Investors are interested in growth potential of a business when determining where to invest. Growing markets are able to expand business opportunities, demand for commodities and reduce the effect of competition thereby creating opportunities for new entrants(Aaker, 2008). Therefore, competition is a key factor in determining the suitability of a global market. The possibility of new entrants, bargaining power from suppliers and customers’ bargaining power are key measures of competition in a market. Good markets are able to meet the needs of both the rich and the poor who depend on competition of business to lower prices(Luo, 2007). Companies that invest in global markets are driven by the need to expand businesses at cheaper cost that gives maximum benefits. Low operation costs in certain countries also encourage people to invest in global markets (Bremmer, 2010). A country that produces goods at low price than the world price have a competitive advantage when they expand to global markets. They are able to enter new markets with a low price for the same or better quality of goods and services (Santos & Brito, 2012). However, such businesses still require conducting investigation on market trends to understand dynamics that change market needs(Luo, 2007). Monitoring international market trends Crucial factors that analyse international markets should be considered before a company makes decision to expand in international markets (Friebel, Schweiger, & others, 2012). They include analysis of market size, the cost of running the business, diversity of customer needs, existing market needs and the options in market accessibility. It is important to analyse potential customers through literature review or through interrogating market experts using tools such as CAGE and PESTLE(Startienė & Remeikienė, 2015). There exit regional and national differences in markets. Therefore, it is important to analyse individual international market segments. Moreover, within a country, there are market segments that require analysis and better strategies that overcome particular needs of a market segment (Chidambaran, Palia, & Zheng, 2008). For example, rural areas have specific challenges that are not experienced by urban areas such as poor road networks and distribution challenges. The culture of people may influence consumption of a commodity. Companies should be culturally sensitive when venturing into new markets(Hollensen, 2015). Moreover, international businesses value understanding local consumers. It is important to understand customer values and factors that influence their decisions to buy certain commodities. The price of a commodity is a key factor that influence customer decision making. Besides, customers are also influenced by the quality of goods and services. Therefore, the price and quality of goods and services influence the influence how customers consume them (“Market analysis, 2015"). Subsequently, they influence local, regional and international market opportunities available for businesses. Before, venturing into foreign markets, businesses are required to conduct surveys to determine customer values and preferences in order to establish viability of an international business venture(Hollensen, 2015). The existing local laws, peace and stability in a country is a consideration that international businesses rely on to determine suitability of investing in a foreign market. There are laws that discourage international companies venture by protecting local firms from competition and taxing foreign companies (Wiedmann et al., 2015). Peace and stability in foreign countries is also essential in ensuring there is a good business environment free from insecurity related disruption and destabilization of businesses(Hollensen, 2015). Market analysis is key in tapping global market opportunities. PESTEL is one of the common tools used to analyse markets (Sahota, 2010). It analyses all the crucial areas of establishing a good business opportunity by looking at social cultural, legal, political, environmental, economic and technological aspects of foreign markets to identify the opportunities available and prepare to minimize or avoid threats and weaknesses that the business could be having(Startienė & Remeikienė, 2015). Screening the macro-environment enable a firm to make strategic policies that are able to respond to market needs and forces that influence international market opportunities thereby enabling the business to make sustainable profits by exploiting the opportunities and avoiding the threats presented by international markets (Crotty, 2009). Through use of PESTEL, companies are able to determine applicable consideration in a foreign market, categorize them and make conclusions on how best the company can maximize gains from utilizing its strengths to exploit the available opportunities while preventing the effect of threats and weaknesses that face a certain business(Startienė & Remeikienė, 2015). Additional tools are also required to compare the performance of various markets by comparing different countries to enable businesses decide on the suitable locations to expand their businesses. The CAGE framework is an essential tool for analysing and comparing markets in different countries. It looks at the geographical, economical, administrative and cultural differences between or among countries to raise adequate information that guide businesses on the best international market to invest in(Hollensen, 2015). A firm’s international experience is crucial in determining preparedness of a business to expand. Moreover, it is crucial to conduct an internal analysis of organisation strengths in preparation for expanding to global markets. Internal aspects of consideration include the technical ability of a company, the objectives of the company in international markets, technology and networks to assess the global markets and most importantly availability of resources to finance the foreign market venture(Crotty, 2009). Hypothesis The first hypothesis is that global market opportunities will increase in the year 2017. The second hypothesis is that the overall global economy will grow in 2017. The third hypothesis is that there will be reduction risk that is associated in with global market opportunities. 6. Methodology This section will explain the methods that were used to collect and analyse data and how the research was carried out. Study design The study adopted a cross-sectional study design whereby data was collected over a specific period to determine the views of respondents at that particular time and relied on both primary and secondary data. Study Area The study a global survey conducted with a focus on 140 associations of global investors. Study participants The study involved 140 participants drawn from associations of global investors that has members across the world. Inclusion and exclusion criteria Data collection technique All the 140 global investors’ association representatives were invited to participate in the survey. Thereafter, a convenient sample of 132 was used to obtain data based on the number of responses received. In a non-probability sampling criteria, the researcher is allowed to use the convenient number that is adequate to provide sufficient evaluation of the hypothesis. Additionally, the researcher is allowed to interview the people who are having a certain characteristic or information that is required. The information up to a situation where the researcher feels adequate information has been obtained. An invitation was sent to all the 140 participants to fill an online survey. There were 9 questions set that aimed at analysing the available global market opportunities and potential risks for the year 2017. They also aimed at finding out the markets that are expected to have the highest return on investments. Secondary data was also obtained from World Data Bank, and review of journal articles through google scholar (Berger, 2015). 7. Data analysis Primary data obtained was analysed using Statistical Programme for Social Sciences version 22 and secondary data was analysed by grouping concepts and findings that are useful in determining trends for global market opportunities. Findings were then presented through narratives, diagrams and charts. Reliability and validity The questionnaire was discussed with five global investors to improve its quality and reliability to test the hypothesis. Thereafter, internal reliability was measured using Cronbach’s Alpha method. Techniques for compliance with ethics The researcher sought approval from the Ethics Committee. Participants were required to give informed consent before filling the survey. Additionally, participants were not required to fill their names on the questionnaire. 8. Results and Discussions 8.1. Results 8.1.1. Demographic characteristics of the sample The researcher invited 140 leaders from the associations of global investors drawn across the globe to participate in the study. A total of 132 respondents completed the questionnaire and this translated to a 94.1% response rate. Table 1: Demographic characteristics Variable Choice Frequency Percentage Sex Male 89 67.4% Female 43 32.6% Age 25-34years 6 4.5% 35-44 years 48 36.4% 45-60 years 55 41.7% 61 and above 23 17.4% Experience in years 0-10 years 15 11.4% 10-20 years 56 42.4% 20-30 years 35 26.5% 30 and above 26 19.7% Continent of origin America 39 29.5% Africa 18 13.6% Asia 20 15.2% Australia 19 14.4% Europe 36 27.3% The demographic profile of the respondents is illustrated in Table 1 above with males contributing to 67.4% of the respondents while female association leaders accounted for 32.6% of the respondents. Majority (41.7%) of the investment experts were aged between 45-60 years while the 25-34 years age bracket constituted the least proportion of respondents at 4.5%. The researcher also sought to ascertain the years of experience of the respondents and majority of them (42.4%) had accrued between 10-20 years of experience. Finally, the researcher ascertained the continents from which the respondents originated with the majority (29.5%) being American originals. 8.1.2. Best performing markets in 2017 The researcher asked the respondents to review the key market indicators for major markets and establish those that will record the best performance in 2017. The table below is an illustration of those findings: Table 2: Best performing markets in 2017 Variable Mean Standard Deviation China 9.8% 0.132 India 14.4% 1.423 USA 25.8% 2.237 UK 14.4% 1.423 Australia 12.9% 1.321 Russia 7.6% 0.124 South America 6.1% 0.117 Africa 9.1% 0.136 Majority of the respondents (25.4%) rooted for the United States as the most prospective market that will record the highest performance in 2017. The United Kingdom came at a distant second together with India both of which accounted for 14.4% of the respondents. Australia accounted for 12.9% of the respondents while China accounted for 9.8% of the respondents. Africa’s performance accounted for 9.1% followed by Russia at 7.6% and South America at 6.1%. The diagram below is a pie-chart presentation of the statistics: Figure 1: Best performing markets in 2017 8.1.3. Projected Gross Domestic Product for key global markets The respondents were invited to consider specific indicators that contribute to Gross Domestic Product in key global markets in order to project the extent to which these markets would grow in 2017. The table below is shows the average of the projected GDP growths for the identified markets: Table 3: Projected Gross Domestic Product for key global markets Country Mean Standard Deviation China 6.4 1.325 India 8.0 2.342 USA 2.5 0.826 UK 2.1 0.845 Russia 4.1 0.014 South America 5.2 0.972 Africa 4.2 0.934 Based on these statistics, India stood out with an estimated GDP growth of 8.0 followed by China at 6.4. The experts projected that South America would record a GDP of 5.2 in 2017 while Africa would record a GDP growth of 4.2. The GDP growth for the United States and the United Kingdom was estimated at 2.5 and 2.1 respectively. The diagram below is a graphical presentation of these statistics: Figure 2: Projected Gross Domestic Product for key global markets 8.1.4. Global challenges requiring entrepreneurial solutions The researcher invited the respondents to evaluate some of the global challenges that required entrepreneurial solutions thus being potential investment opportunities for global firms in 2017. The results of this assessment are summarized in Table 4 below: Table 4: Global challenges Variable Mean Standard Deviation Global food crisis 25% 5.264 Unsustainable urbanization 19.7% 4.321 Marine life destruction 12.9% 1.375 Extreme Weather 17.4% 3.897 Lack of fresh water 13.6% 1.426 Non-communicable diseases (NCDs) 9.8% 0.827 Majority of the respondents (25%) identified global food crisis as the biggest challenge that can create potential business in 2017. 19.7% of the respondents felt that unsustainable urbanization will present a global challenge in 2017 while 17.4% felt that extreme weather events is a potential investment frontier. Lack of fresh water accounted for 13.6% of the respondents while marine life destruction and non-communicable diseases (NCDs) accounted for 12.9% and 9.8% respectively. Figure 3: Global challenges 8.1.5. Global Market opportunities This study set out to ascertain potential market opportunities for global firms in 2017. The respondents were asked to review a list of potential opportunities and identify the most promising opportunities for global firms in 2017. The summary of this assessment is illustrated in the table below: Table 5: Global Market opportunities Variable Mean Standard Deviation Weather forecasting services 6.8% 0.437 Fresh water production 19.7% 2.645 Green interconnected cities 9.8% 0.943 Investments in rural growth 9.1% 0.921 ICT solutions for global challenges 25.0% 3.896 Smart farming 13.6% 1.428 Low transport cities 10.6% 1.327 Marine life investments 5.3% 0.429 25% of the respondents ascertained that ICT solutions for global challenges would present the greatest market opportunity for global firms in 2017. This was followed by production of fresh water at 19.7% whereas smart farming contributed to 13.6% of the respondents. Other identified market opportunities included investments in low transport cities (10.6%), green interconnected cities (9.8%), investments in rural growth (9.1%), weather forecasting services (6.8%), and marine life investments (5.3%). The diagram below is a graphical presentation of these findings: Figure 4: Global Market opportunities 8.1.6. Global market risks The researcher wanted to identify the greatest risks for global market risks that will directly impact global businesses in 2017 if they occurred. The table below is a summary of these findings: Table 6: Global market risks Variable Mean Standard Deviation Weapons of mass destruction 4.5% 0.528 Unsteady energy prices 20.5% 3.225 Water and food crises 13.6% 1.864 Climate change and extreme weather 10.6% 1.543 Cyber attacks 9.1% 1.201 Natural catastrophes 12.1% 1.692 Illicit trade 10.6% 1.543 Terrorism 7.6% 0.785 Political instability 5.3% 0.732 Unmanageable inflation 6.1% 0.746 Majority of the respondents (20.5%) identified the unsteady energy prices as the greatest risk for global businesses in 2017. Water and food crises accounted for 13.6% while natural catastrophes as well as illicit trade both represented 10.6% of the respondents. Other potential risks to global businesses in 2017 included cyber attacks (9.1%), terrorism (7.6%), unmanageable inflation (6.1%), political instability (5.3%), and weapons of mass destruction (4.5%). The diagram shown below is a pie chart presentation of these statistics: Figure 5: Global market risks 8.2. Test of the research hypotheses Ha1: The hypothesis postulated that, there will be an increase in global market opportunities in 2017. The researcher utilized the Pearson’s method of correlation to test the different variables for this hypothesis. The findings illustrated in tables 2 and 5 above reveal a positive association between the identified market opportunities and the performance indicators for key global markets. Markets with the best performance with greater opportunities will include the United States (25.8%), India (14.4%), the United Kingdom (14.4%), China (9.8%), Africa (9.1), Russia (7.6%), and South America (6.1%). The total sample’s assessment was (r=.743 P Read More