Industrial Marketing Management 33 (2004) 607 – 617

Complementary approaches to preliminary foreign market opportunity assessment: Country clustering and country ranking
S. Tamer Cavusgil*, Tunga Kiyak, Sengun Yeniyurt
Department of Marketing and Supply Chain Management, The Eli Broad Graduate School of Management, Michigan State University, 370 North Business College, East Lansing, MI 48824, USA Received 2 November 1998; received in revised form 16 May 2003; accepted 23 October2003 Available online 24 December 2003

Abstract Companies seeking to expand abroad are faced with the complex task of screening and evaluating foreign markets. How can managers define, characterize, and express foreign market opportunity? What makes a good market, an attractive industry environment? National markets differ in terms of market attractiveness, due to variations in the economic and commercial environment, growth rates, political stability, consumption capacity, receptiveness to foreign products, and other factors. This research proposes and illustrates the use of two complementary approaches to preliminary foreign market assessment and selection: country clustering and country ranking. These two methods, in combination, can be extremely useful to managerial decision makers in the early stages of foreign market selection. D 2004 Published by Elsevier Inc.
Keywords: Country ranking; Clustering; Foreign market selection; Country market assessment

1. Introduction Marketing across national boundaries has become imperative for long-term company survival and profitability. However, faced with so many countries to evaluate, a business executive can be overwhelmed with the diversity and complexity of alternative market opportunities. There are vast differences among countries in terms of size, income, language, infrastructure, market access, culture, and many other important