In a fast changing environment companies are forced to act so – namely fast.
If a company grows, sooner or later the domestic market becomes too small.
Then the company has to enter a new market to achieve sustainable growth.
According to the experience of the author some companies decide rather on
emotions than on facts. Especially small and medium-sized enterprises do
not have the resources to invest a lot of money into market research or for
expensive consultants. A logical consequence could be that SME invest in
countries without checking the critical measurements which then leads to a
waste of time, resources and money. If such companies do not have a stable
financial foundation it can lead therefore to critical economic difficulties.
The output of this project is a guideline especially for small and mediumsized
enterprises. The author conducted interviews with internationally
operating companies to get some practical best practise expertise. Not only
the analysed key figures are an output of the interviews but also the
interpretation of them and how a company has acquired them. Very often the
problem is to get the right and reliable information for a market. In a second
stage literature is introduced into the guideline to get a mixture of both –
practical but also academic inputs. With the present project a SME gets an
impression what happens in internationally operating companies but also a
choice of tools to verify future market entry intentions.
Table of Contents
1. INTRODUCTION
1.1. Objectives of the Master Thesis
1.2. Composition of the Master-Thesis
2. RESEARCH
2.1. Primary research
2.2. Qualitative research – INTERVIEWS
2.3. Decision of interview-type
2.4. Interview agreement
2.5. Interview Checklist
2.6. Analysis of the interviews
2.7. Qualitative assessment of the interviews
2.7.1. When was your last market entry abroad?
2.7.2. Why have you chosen this market?
2.7.3. Which information did you collect before you made the decision to enter this particular market?
2.7.4. For which decision is the information necessary?
2.7.5. Where do you get this information?
2.7.6. What are the five most important key factors of all points you have mentioned?
2.8. Significant points of the interviews
3. SECONDARY RESEARCH
3.1. Market analysis
3.2. Competitors
3.3. Quality requirements
3.4. Distribution channels
3.5. Foreign Government
3.6. Statistical data
3.6.1. Real GDP
3.6.2. Unemployment rate
3.6.3. Exchange rate risks
4. GUIDELINE FOR SMALL AND MEDIUM-SIZED ENTERPRISES
4.1. Market analysis
4.1.1. Market size
4.1.2. Market growth
4.1.3. Profitability
4.1.4. Quality requirements
4.2. Competition
4.3. Distribution channels
4.4. Foreign Government
4.5. Statistical data
4.5.1. Real GDP
4.5.2. Unemployment rate
4.5.3. Exchange rate risks
4.6. Business trip
4.7. FMEA
4.8. Business plan
5. CONCLUSION
6. BIBLIOGRAPHY
6.1. Books and Articles
6.2. Internet
Objectives & Research Themes
The main objective of this work is to provide a systematic and practical guideline for small and medium-sized enterprises (SMEs) to identify potential foreign markets for sales operations. The central research problem addresses the tendency of many companies to base market entry decisions on emotions rather than on objective facts, which often leads to a waste of financial resources and time.
- Systematic identification of market entry criteria for SMEs.
- Development of a practical decision-making framework based on qualitative interviews with industry experts.
- Integration of academic market analysis tools into a user-friendly guideline.
- Implementation of risk assessment methods (specifically FMEA) to support objective planning.
Extract from the Book
4.7. FMEA
Bohn (2003, pp. 9) states that beside Quality Function Deployment, Failure Tree Analysis, Design of Experiments, Poka Yoke, Statistical Process Control, the FMEA – Failure Mode and Effect Analysis – is one of six Quality Management tools. The beginnings of the FMEA were in the area of Aerospace Technology and the reason for its development was to prevent failures in an early development stage of a product. Through the usage within the Automobile Industry it became popular and today it is used in a lot of companies all over the world.
The FMEA is an approach to identify certain risks systematically. It is also a cause and effect analysis to detect risks and set necessary actions into motion within a process, product development process, construction or system planning. The sense is to identify possible failures, the effect and the causes of the failures. It is important to analyse the real causes and not only other effects. Therefore three different areas are used:
Occurrence: how possible is it that the failure occurs. Usually assessed between one (low) and ten (high).
Detection: how possible is it that the failure is detected. Usually assessed between one (low) and ten (high).
Severity: difference in the functionality from a customer’s perspective. But not customers but also security risks and statutory provisions. Usually assessed between one (low) and ten (high).
These three factors get assessed and multiplied which leads to the risk priority number. The risk priority number qualifies a potential risk. Each company has to define a borderline and if a risk priority number is over that borderline the team has to decide on actions, responsibilities and deadlines for it. When the action is set into motion, the team assesses the risk once again and then the risk should be less than the defined borderline. From an author’s point of view the borderline should be 125 which means that if every category is assessed with the medium (five) then the RPN will be 125. This value is very usual in a line of business.
Summary of Chapters
1. INTRODUCTION: Discusses the necessity of market entries for business growth and outlines the thesis objective of creating a guideline for SMEs to prevent resource waste.
2. RESEARCH: Details the primary research methodology, specifically the qualitative approach using expert interviews to gather practical best-practice insights.
3. SECONDARY RESEARCH: Provides the academic foundation for market analysis, covering topics such as competition, distribution channels, government regulations, and statistical data.
4. GUIDELINE FOR SMALL AND MEDIUM-SIZED ENTERPRISES: Presents the core framework, offering practical steps for market analysis, competitive assessment, risk management using FMEA, and business planning.
5. CONCLUSION: Summarizes the key findings, noting that while companies often face time constraints, a systematic and objective approach is essential for successful international market expansion.
Keywords
Market entry, SME, Small and medium-sized enterprises, Sales organisation, Market analysis, Competitive advantage, Risk management, FMEA, Business plan, Foreign trade, Strategic development, Qualitative research, Market potential, Decision-making, Resource efficiency.
Frequently Asked Questions
What is the core purpose of this study?
The study aims to create a practical, general guideline for small and medium-sized enterprises (SMEs) to help them identify potential foreign markets for sales operations in a systematic and cost-efficient manner.
What are the primary themes discussed in this work?
Key themes include market analysis, competitor assessment, evaluation of quality requirements, the role of foreign governments, and the use of statistical data for better decision-making.
What is the ultimate goal of the proposed guideline?
The goal is to provide SMEs with objective criteria and tools to verify market entry intentions, thereby minimizing the waste of time, money, and organizational resources.
Which scientific methods were applied in this research?
The research uses a phenomenological paradigm, specifically conducting in-depth, semi-structured qualitative interviews with internationally operating companies to gather best-practice expertise.
What is covered in the main part of the thesis?
The main part synthesizes primary expert interview data with secondary academic literature to build a structured 11-point guideline that guides companies through analysis, risk assessment, and planning.
Which keywords best characterize this document?
Important keywords include market entry, SME, strategic development, FMEA, risk management, and competitive analysis.
How does the author define a "ghost potential" in a market?
A ghost potential refers to a perceived market demand that exists but cannot materialize due to underlying issues, such as a lack of purchasing power in underdeveloped economies or technologies that fail to gain traction.
Why is the FMEA tool considered central to the author's guideline?
The FMEA (Failure Mode and Effect Analysis) allows companies to systematically identify, assess, and prioritize potential risks before entering a market, helping them implement preventive actions.
How should a company use the competitor profile comparison tool provided in the book?
It should be used to weigh key success factors (e.g., quality, logistics, price) and compare the company's own performance against both local and international competitors in the target market.
- Quote paper
- Mag.(FH) Sasha Petschnig (Author), 2008, Identify potential countries for a market entry with a sales organisation, Munich, GRIN Verlag, https://www.grin.com/document/112422
