INFRASTRUCTURAL ASSESSMENT: A QUANTITATIVE TOOL WITHIN BUSINESS & ECONOMICS

Postgraduate

ABSTRACT

Traditional theories, models, and methods often address a general view of the environment including sociocultural, technological, political, and economic factors. However, there is a lack in infrastructural attention in these concepts which this thesis intends to contribute with by analyzing how regional specific infrastructural variables can be aggregated to one comparative measure and what that measure’s scope of use could be in the market analysis? Hence, the purpose of this thesis is to contribute to the strategic planning process research with a supporting quantitative tool, based on statistical metrics, for determining the market potential.  This thesis has an inductive approach and is primary based on documentary secondary data and the strategic planning process is the main theory of concern when evaluating the possibilities of infrastructural assessment. As a complement, the infrastructural concerns in the economics are also dealt with.  The empirics are compiled and calculated in a manner which allows an indexing and the finalized result is presented as an Infrastructural Status Index (InfraStat Index). Some of the utilities of this index are that it can be a complementary part of the PEST- and SWOT-models and a supporting tool in companies’ strategic planning processes. The index has both business and macroeconomic scopes of use and one of the summarizing conclusions is that further research within this concept should incorporate more variables in order to retrieve a more comprehensive result.

PROBLEM DISCUSSION

Corporate internationalization may be of higher importance in the business climate of the 21st century since the advantages of a global presence are more obvious nowadays. This statement is supported by the fact that an increasingly amount of companies around the world decide to expand their businesses to foreign markets which increases the global competition and intensifies the global and local rivalry (Hollensen 2007). In order to parry global competitors on the local markets, local companies are forced to consider and explore global possibilities. This could provide the local companies the same prerequisites in form of economies of scale, resource utilization, and international networks as their global rivals.    Due to this increasing internationalization trend, the need for an extensive and a corporate specific environmental analysis is growing among both local and global companies (Frankelius 2001). The environmental analysis is of great importance, first and foremost, for the purpose of creating an understanding of the surrounding environment and which threats and opportunities the company will be facing. The analysis is also an important part of the exploratory part of the internationalization process since it creates an understanding of how a new market favors or disfavors the entering company. This environmental analysis could, as mentioned above, be of quantitative and/or a qualitative characteristics and there are many areas to consider, e.g. the four PEST categories. When conducting an environmental analysis, one should not rely independently on one single method but rather considering both quantitative and qualitative elements in order to obtain both comparable and in-depth information (Hollensen 2007). Since companies have different objectives and purposes of their environmental analyses, it is of high importance to not only conduct wide-ranging analyses but also more narrowed and specific types of analyses, e.g. the corruption barometer by Transparency International (2004), in order to get more corporate specific and concrete information. The importance of, for the company, narrowed, specific and detailed information regarding environmental factors is highly emphasized by Per Frankelius (1997; 2001).   

PURPOSE

The purpose of this thesis is to contribute to the strategic planning process research with a supporting quantitative tool, based on statistical metrics, for determining the market potential.