When planning to venture overseas, we have to consider many factors - from the usual market research to commercial due diligence as well as regulatory/compliance issues that we need to grasp before considering to operate locally.
What most industry practitioners tend to miss out is assessing what's the required Return on Investment (ROI) of venturing into a single or multiple markets within a period of time - usually 1-3 years.
What do we mean by the "required ROI"?
Imagine a situation where you have gathered a certain level of cash, plan to penetrate 3 foreign markets at different risk levels with 5 core products (that were successfully sold in your home country). For each market, you have different levels of market knowledge, several channel partners with varying levels of competencies - which would probably lead you to different customer base/types.
Pop quiz: what would be the estimated returns that you should expect minimally ie. the hurdle rate - for each market?
Developed by leading scorecard solutions group, Vector Scorecard (Asia-Pacific), X Border is the region's first unique, smart scorecard that is able to answer the above questions - taking into account several economic factors PLUS your company's credit strength as well as the country's operational risk indicators as gathered by World Bank.
The X Border Score will then provide an estimated yield - a percentage that is reflective of the risks that you are taking, the opportunity costs and thus signify what you must aim to get for venturing into that particular country.
Having a X Border Score enables you to quantify the risks, estimate the costs involved and plan your resources wisely - thereafter, set a minimum target that you should set.
All factors constant, the lower the risks, the lower is the expected ROI and vice versa.
Now when you start planning your foreign market entry, you don't just get swamped with market data information only - you assess internally, evaluate externally and estimate specifically what your profits should be based on your circumstances.
That is X Border.
For more information about X Border, please enquire within: advisory@vsapac.com
No comments:
Post a Comment