Conducting a critical analysis is an integral part of business planning, especially if the company intends to enter a new market. In the scenario under discussion, the individual is asked as a strategic advisor to the CEO to find a foreign market in which it would be profitable for the company to invest. Since one of the essential conditions is that the country is not on the list of the top 100 regions with the highest GDP, a sensible decision would be to turn to the official ranking to review the countries from the 101st position.
In addition, an important criterion was the requirement for the rapid growth rate of such a market. Thus, Cambodia ranked 107th and increased GDP per capita by 5 percent over 20 years (GDP by country, 2017; Woetzel, 2018). Cambodia is a peninsular state in Southeast Asia whose climate can be considered tropical. Due to frequent episodes of extreme weather, insects, and relatively high crime rates, the sale of reliable windows and doors can generate excellent profits.
In this context, it is essential to assess how the company will manage the risks associated with FDI. It is important to consider the country’s political regime — it is a monarchy, combined with the power of a bicameral parliament — and the development of local infrastructure. Under a parliamentary monarchy, free trade may be limited, so that additional analysis would require research into the experience of business interactions with the Cambodian government.
On the other hand, Cambodia is a relatively developing country where roads and highways are not well advanced. Therefore, the company will have to investigate the logistics of factory locations further or even invest in constructing new roads. Ultimately, this means that the choice of Cambodia meets the initial criteria, but investing in this market will require clarification of all risks.
References
GDP by country. (2017). Worldometer. Web.
Woetzel, J., Madgavkar, A., Seong, J., Bughin, J., & Manyika, J. (2018). Outperformers: High-growth emerging economies and the companies that propel them. McKinsey Global Institute. Web.