Analysis of African Iron and Steel Market for Wuhan Iron and Steel Corporation (WISCO)’s Possible Entry: Preliminary Screening and Final Selection Statistical Scoring Model
Affiliation(s)
School of Economics and Management, China University of Geosciences (Wuhan), Wuhan, China.
School of Economics and Management, China University of Geosciences (Wuhan), Wuhan, China.
ABSTRACT
This paper described the second part of my PhD research project where African Iron and Steel Market was investigated to support the decision of the entry of Wuhan Iron and Steel Corporation (WISCO) into African Market. The data used are the same as previous study, observations of macroeconomic variables, such as GDP per capita, the index of consumer prices, import iron, the real effective exchange rate, the number of urban population, imports and exports total made on 19 African countries for a period that spans from 2008 to 2012. The countries concerned are: Algeria, Burkina Faso, Ivory Coast, Egypt, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Senegal, Seychelles, South Africa, Tanzania, Togo, Tunisia, and Zambia. The empirical study in this paper is divided into two parts: the first part is preliminary screening and the second part is the final selection statistical scoring model. In the first part, the preliminary screening was made by ranking the panel data by political stability variable as it was the main decision criteria of WISCO’s international market selection into the African Iron and Steel Market. We sorted our 19 Africa countries for our study by political stability and absence of violence/terrorism percentile value 2013 from the largest to smallest and selected the first 10th rank. The 10 countries that were selected to the next step of our study from our preliminary screening were: Mauritius, Seychelles, Zambia, South Africa, Senegal, Tanzania, Malawi, Mozambique, Togo and Morocco. In the second part of the empirical findings, we analyzed African Iron and Steel Market following the steps of our final selection statistical inverse coefficient of variation scoring model. We started by analyzing statistical inverse coefficient of variation of every variable in the demand side, in supply side, and then, we analyzed the final score made by every country and suggested a final selection. Our analysis of the final score concluded that the five countries that would be suggested to Wuhan Iron and Steel Corporation (WISCO) were: first, Togo with a final score of 70.20, second, Tanzania with a final score of 18.63, third, Morocco with a final score of 15.58, fourth, Senegal with a final score of 14.57, and fifth, Mozambique with a final score of 13.68. WISCO then can choose from these five suggested countries to enter into African Market.
This paper described the second part of my PhD research project where African Iron and Steel Market was investigated to support the decision of the entry of Wuhan Iron and Steel Corporation (WISCO) into African Market. The data used are the same as previous study, observations of macroeconomic variables, such as GDP per capita, the index of consumer prices, import iron, the real effective exchange rate, the number of urban population, imports and exports total made on 19 African countries for a period that spans from 2008 to 2012. The countries concerned are: Algeria, Burkina Faso, Ivory Coast, Egypt, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Senegal, Seychelles, South Africa, Tanzania, Togo, Tunisia, and Zambia. The empirical study in this paper is divided into two parts: the first part is preliminary screening and the second part is the final selection statistical scoring model. In the first part, the preliminary screening was made by ranking the panel data by political stability variable as it was the main decision criteria of WISCO’s international market selection into the African Iron and Steel Market. We sorted our 19 Africa countries for our study by political stability and absence of violence/terrorism percentile value 2013 from the largest to smallest and selected the first 10th rank. The 10 countries that were selected to the next step of our study from our preliminary screening were: Mauritius, Seychelles, Zambia, South Africa, Senegal, Tanzania, Malawi, Mozambique, Togo and Morocco. In the second part of the empirical findings, we analyzed African Iron and Steel Market following the steps of our final selection statistical inverse coefficient of variation scoring model. We started by analyzing statistical inverse coefficient of variation of every variable in the demand side, in supply side, and then, we analyzed the final score made by every country and suggested a final selection. Our analysis of the final score concluded that the five countries that would be suggested to Wuhan Iron and Steel Corporation (WISCO) were: first, Togo with a final score of 70.20, second, Tanzania with a final score of 18.63, third, Morocco with a final score of 15.58, fourth, Senegal with a final score of 14.57, and fifth, Mozambique with a final score of 13.68. WISCO then can choose from these five suggested countries to enter into African Market.
KEYWORDS
African Iron and Steel Market, International Market Selection, Preliminary Screening, Inverse Co-efficient of Variation, Final Selection Statistical Scoring Model
African Iron and Steel Market, International Market Selection, Preliminary Screening, Inverse Co-efficient of Variation, Final Selection Statistical Scoring Model
Cite this paper
Fidelys, R. and Liang, Y. (2015) Analysis of African Iron and Steel Market for Wuhan Iron and Steel Corporation (WISCO)’s Possible Entry: Preliminary Screening and Final Selection Statistical Scoring Model. American Journal of Industrial and Business Management, 5, 235-257. doi: 10.4236/ajibm.2015.55026.
Fidelys, R. and Liang, Y. (2015) Analysis of African Iron and Steel Market for Wuhan Iron and Steel Corporation (WISCO)’s Possible Entry: Preliminary Screening and Final Selection Statistical Scoring Model. American Journal of Industrial and Business Management, 5, 235-257. doi: 10.4236/ajibm.2015.55026.
References
[1] Ravelomanana, F., Yan, L., Mahazomanana, C. and Miarisoa, L.P. (2014) Modeling Africa’s Demand for Iron and Steel Importation: An International Market Estimation Method Perspective. American Journal of Industrial and Business Management, 4, 799-815.
http://dx.doi.org/10.4236/ajibm.2014.412086 [2] Papadopoulos, N. and Denis, J.E. (1988) Inventory, Taxonomy and Assessment of Methods for International Market Selection. International Marketing Review, 5, 38-51.
http://dx.doi.org/10.1108/eb008357 [3] Pezeshkpur, C. (1979) Systematic Approach to Finding Export Opportunities. Harvard Business Review, 57, 182-196. [4] Douglas, S.P. and Craig, C.S. (1992) Advances in International Marketing. International Journal of Research in Marketing, 9, 291-318.
http://dx.doi.org/10.1016/0167-8116(92)90002-3 [5] Steenkamp, J.-B.E.M. and Ter Hofstede, F. (2002) International Market Segmentations: Issues and Perspectives. International Journal of Research in Marketing, 19, 185-213.
http://dx.doi.org/10.1016/S0167-8116(02)00076-9 [6] Shankarmahesh, M.N., Olsen, H.W. and Honeycutt Jr., E.D. (2005) A Dominant Product-Dominant Country Framework of Industrial Export Segmentation. Industrial Marketing Management, 34, 203-210.
http://dx.doi.org/10.1016/j.indmarman.2004.09.002 [7] Sakarya, S., Eckman, M. and Hyllegard, K.H. (2007) Market Selection for International Expansion: Assessing Opportunities in Emerging Markets. International Marketing Review, 24, 208-238.
http://dx.doi.org/10.1108/02651330710741820 [8] Kumar, V., Stam, A. and Joachimsthaler, E.A. (1993) An Interactive Multi-Criteria Approach to Identifying Potential Foreign Markets. Journal of International Marketing, 2, 29-52. [9] Ayal, I. and Zif, J. (1978) Competitive Market Choice Strategies in Multinational Marketing. Columbia Journal of World Business, 13, 72-81. [10] Davidson, W.H. (1983) Market Similarity and Market Selection: Implications for International Marketing Strategy. Journal of Business Research, 11, 439-456.
http://dx.doi.org/10.1016/0148-2963(83)90004-8 [11] Cavusgil, S.T. (1985) Guidelines for Export Market Research. Business Horizons, 28, 27-33.
http://dx.doi.org/10.1016/0007-6813(85)90082-5 [12] Hoffman, J.J. (1997) A Two Stage Model for the Introduction of Products into International Markets. Journal of Global Marketing, 11, 65-86.
http://dx.doi.org/10.1300/J042v11n01_05 [13] Andersen, P.H. and Strandskov, J. (1998) International Market Selection: A Cognitive Mapping Perspective. Journal of Global Marketing, 11, 65-84.
http://dx.doi.org/10.1300/J042v11n03_05 [14] Brewer, P. (2000) International Market Selection: Developing a Model from Australian Case Studies. International Business Review, 10, 155-174.
http://dx.doi.org/10.1016/S0969-5931(00)00049-4 [15] Andersen, O. and Buvik, A. (2002) Firms’ Internationalisation and Alternative Approaches to the International Customer/Market Selection. International Business Review, 11, 347-363.
http://dx.doi.org/10.1016/S0969-5931(01)00064-6 [16] Rahman, S.H. (2003) Modelling of International Market Selection Process: A Qualitative Study of Successful Australian International Businesses. Qualitative Market Research: An International Journal, 6, 119-132.
http://dx.doi.org/10.1108/13522750310470127 [17] Alon, I. (2004) International Market Selection for a Small Enterprise: A Case Study in International Entrepreneurship. SAM Advanced Management Journal, 69, 25-33. [18] Ozorhon, B., Dikmen, I. and Birgonul, M.T. (2006) Case-Based Reasoning Model for International Market Selection. Journal of Construction Engineering and Management, 132, 940-947.
http://dx.doi.org/10.1061/(ASCE)0733-9364(2006)132:9(940) [19] Viviers, W. and Pearson, J.J.A.P. (2007) The Construction of a Decision Support Model for Evaluating and Identifying Realistic Export Opportunities in South Africa. Report Prepared for the Department of Trade and Industry, South Africa, May, 92 p. (Unpublished) [20] Viviers, W., Rossouw, R. and Steenkamp, E.A. (2009) The Sustainability of the DSM for Identifying Realistic Export Opportunities for South-Africa: 2007-2008. Report Prepared for the Department of Trade and Industry, South Africa, February,105 p. (Unpublished) [21] Viviers, W., Steenkamp, E.A. and Rossouw, R. (2010) Identification Realistic Export Opportunities for South Africa: Application of a Decision Support Model (DSM) Using HS 6-Digit Level Product Data. Report Prepared for the Department of Trade and Industry, South Africa, September, 57 p. (Unpublished) [22] Green, R.T. and Allaway, A.W. (1985) Identification of Export Opportunities: A Shift-Share Approach. Journal of Marketing, 49, 83-88.
http://dx.doi.org/10.2307/1251178 [23] Russow, L.C. and Okaroafo, S.C. (1996) On the Way towards Developing a Global Screening Model. International Marketing Review, 13, 46-64.
http://dx.doi.org/10.1108/02651339610111344 [24] Papadopoulos, N., Chen, H.B. and Thomans, D.R. (2002) Toward a Tradeoff Model for International Market Selection. International Business Review, 11, 165-192.
http://dx.doi.org/10.1016/S0969-5931(01)00054-3 [25] Freudenberg, M. and Paulmier, T. (2005) Export Potential Assessment in Vietnam. (Unpublished Report of the International Trade Centre, Market Analysis Section) [26] Freudenberg, M. and Paulmier, T. (2005) Export Potential Assessment in Lao PDR. (Unpublished Report of the International Trade Centre, Market Analysis Section) [27] Freudenberg, M., Paulmier, T., Bijl, B. and Ikezuki, T. (2007) Export Potential Assessment in Nepal. (Unpublished Report of the International Trade Centre, Market Analysis Section) [28] Freudenberg, M., Paulmier, T., Ikezuki, T. and Conte, K. (2008) Export Opportunity Scan for Jordan: Second Draft. (Unpublished Report of the International Trade Centre, Market Analysis Section) [29] Cavusgil, S.T. (1997) Measuring the Potential of Emerging Markets: An Indexing Approach. Business Horizons, 40, 87-91.
http://dx.doi.org/10.1016/S0007-6813(97)90030-6 [30] Arnold, D.J. and Quelsh, J.A. (1998) New Strategies in Emerging Markets. Sloan Management Review, 40, 7-20. [31] Verno, C. (2008) The Trade Opportunity Matrix (TOM): An Overview of Canadian Export Opportunities. [32] Alexandre, H. (2000) L’Individu face au marché: Investisseurs, spéculateurs et crise boursiers. European Medicines Agency. [33] OECD (2004) Principles of Corporate Governance. [34] Fosu, A.K. (1992) Political Instability and Economic Growth: Implication of Coup Events in Sub-Saharan Africa. American Journal of Economics and Sociology, 61, 329-348. [35] Taylor, C.L. and Hudson, M.C. (1972) World Handbook of Political and Social Indicators. 2nd Edition, Yale University Press, New Haven, 271-274. [36] Gupta, D.K. (1991) On the Methodology of Constructing a Composite Indicator for Political Instability: A Cross-National Study. In: Frantz, R., Singh, H. and Gerber, J., Eds., Handbook of Behavioral Economics, JAI Press Inc., Greenwich, 151-178.
[1] Ravelomanana, F., Yan, L., Mahazomanana, C. and Miarisoa, L.P. (2014) Modeling Africa’s Demand for Iron and Steel Importation: An International Market Estimation Method Perspective. American Journal of Industrial and Business Management, 4, 799-815.
http://dx.doi.org/10.4236/ajibm.2014.412086 [2] Papadopoulos, N. and Denis, J.E. (1988) Inventory, Taxonomy and Assessment of Methods for International Market Selection. International Marketing Review, 5, 38-51.
http://dx.doi.org/10.1108/eb008357 [3] Pezeshkpur, C. (1979) Systematic Approach to Finding Export Opportunities. Harvard Business Review, 57, 182-196. [4] Douglas, S.P. and Craig, C.S. (1992) Advances in International Marketing. International Journal of Research in Marketing, 9, 291-318.
http://dx.doi.org/10.1016/0167-8116(92)90002-3 [5] Steenkamp, J.-B.E.M. and Ter Hofstede, F. (2002) International Market Segmentations: Issues and Perspectives. International Journal of Research in Marketing, 19, 185-213.
http://dx.doi.org/10.1016/S0167-8116(02)00076-9 [6] Shankarmahesh, M.N., Olsen, H.W. and Honeycutt Jr., E.D. (2005) A Dominant Product-Dominant Country Framework of Industrial Export Segmentation. Industrial Marketing Management, 34, 203-210.
http://dx.doi.org/10.1016/j.indmarman.2004.09.002 [7] Sakarya, S., Eckman, M. and Hyllegard, K.H. (2007) Market Selection for International Expansion: Assessing Opportunities in Emerging Markets. International Marketing Review, 24, 208-238.
http://dx.doi.org/10.1108/02651330710741820 [8] Kumar, V., Stam, A. and Joachimsthaler, E.A. (1993) An Interactive Multi-Criteria Approach to Identifying Potential Foreign Markets. Journal of International Marketing, 2, 29-52. [9] Ayal, I. and Zif, J. (1978) Competitive Market Choice Strategies in Multinational Marketing. Columbia Journal of World Business, 13, 72-81. [10] Davidson, W.H. (1983) Market Similarity and Market Selection: Implications for International Marketing Strategy. Journal of Business Research, 11, 439-456.
http://dx.doi.org/10.1016/0148-2963(83)90004-8 [11] Cavusgil, S.T. (1985) Guidelines for Export Market Research. Business Horizons, 28, 27-33.
http://dx.doi.org/10.1016/0007-6813(85)90082-5 [12] Hoffman, J.J. (1997) A Two Stage Model for the Introduction of Products into International Markets. Journal of Global Marketing, 11, 65-86.
http://dx.doi.org/10.1300/J042v11n01_05 [13] Andersen, P.H. and Strandskov, J. (1998) International Market Selection: A Cognitive Mapping Perspective. Journal of Global Marketing, 11, 65-84.
http://dx.doi.org/10.1300/J042v11n03_05 [14] Brewer, P. (2000) International Market Selection: Developing a Model from Australian Case Studies. International Business Review, 10, 155-174.
http://dx.doi.org/10.1016/S0969-5931(00)00049-4 [15] Andersen, O. and Buvik, A. (2002) Firms’ Internationalisation and Alternative Approaches to the International Customer/Market Selection. International Business Review, 11, 347-363.
http://dx.doi.org/10.1016/S0969-5931(01)00064-6 [16] Rahman, S.H. (2003) Modelling of International Market Selection Process: A Qualitative Study of Successful Australian International Businesses. Qualitative Market Research: An International Journal, 6, 119-132.
http://dx.doi.org/10.1108/13522750310470127 [17] Alon, I. (2004) International Market Selection for a Small Enterprise: A Case Study in International Entrepreneurship. SAM Advanced Management Journal, 69, 25-33. [18] Ozorhon, B., Dikmen, I. and Birgonul, M.T. (2006) Case-Based Reasoning Model for International Market Selection. Journal of Construction Engineering and Management, 132, 940-947.
http://dx.doi.org/10.1061/(ASCE)0733-9364(2006)132:9(940) [19] Viviers, W. and Pearson, J.J.A.P. (2007) The Construction of a Decision Support Model for Evaluating and Identifying Realistic Export Opportunities in South Africa. Report Prepared for the Department of Trade and Industry, South Africa, May, 92 p. (Unpublished) [20] Viviers, W., Rossouw, R. and Steenkamp, E.A. (2009) The Sustainability of the DSM for Identifying Realistic Export Opportunities for South-Africa: 2007-2008. Report Prepared for the Department of Trade and Industry, South Africa, February,105 p. (Unpublished) [21] Viviers, W., Steenkamp, E.A. and Rossouw, R. (2010) Identification Realistic Export Opportunities for South Africa: Application of a Decision Support Model (DSM) Using HS 6-Digit Level Product Data. Report Prepared for the Department of Trade and Industry, South Africa, September, 57 p. (Unpublished) [22] Green, R.T. and Allaway, A.W. (1985) Identification of Export Opportunities: A Shift-Share Approach. Journal of Marketing, 49, 83-88.
http://dx.doi.org/10.2307/1251178 [23] Russow, L.C. and Okaroafo, S.C. (1996) On the Way towards Developing a Global Screening Model. International Marketing Review, 13, 46-64.
http://dx.doi.org/10.1108/02651339610111344 [24] Papadopoulos, N., Chen, H.B. and Thomans, D.R. (2002) Toward a Tradeoff Model for International Market Selection. International Business Review, 11, 165-192.
http://dx.doi.org/10.1016/S0969-5931(01)00054-3 [25] Freudenberg, M. and Paulmier, T. (2005) Export Potential Assessment in Vietnam. (Unpublished Report of the International Trade Centre, Market Analysis Section) [26] Freudenberg, M. and Paulmier, T. (2005) Export Potential Assessment in Lao PDR. (Unpublished Report of the International Trade Centre, Market Analysis Section) [27] Freudenberg, M., Paulmier, T., Bijl, B. and Ikezuki, T. (2007) Export Potential Assessment in Nepal. (Unpublished Report of the International Trade Centre, Market Analysis Section) [28] Freudenberg, M., Paulmier, T., Ikezuki, T. and Conte, K. (2008) Export Opportunity Scan for Jordan: Second Draft. (Unpublished Report of the International Trade Centre, Market Analysis Section) [29] Cavusgil, S.T. (1997) Measuring the Potential of Emerging Markets: An Indexing Approach. Business Horizons, 40, 87-91.
http://dx.doi.org/10.1016/S0007-6813(97)90030-6 [30] Arnold, D.J. and Quelsh, J.A. (1998) New Strategies in Emerging Markets. Sloan Management Review, 40, 7-20. [31] Verno, C. (2008) The Trade Opportunity Matrix (TOM): An Overview of Canadian Export Opportunities. [32] Alexandre, H. (2000) L’Individu face au marché: Investisseurs, spéculateurs et crise boursiers. European Medicines Agency. [33] OECD (2004) Principles of Corporate Governance. [34] Fosu, A.K. (1992) Political Instability and Economic Growth: Implication of Coup Events in Sub-Saharan Africa. American Journal of Economics and Sociology, 61, 329-348. [35] Taylor, C.L. and Hudson, M.C. (1972) World Handbook of Political and Social Indicators. 2nd Edition, Yale University Press, New Haven, 271-274. [36] Gupta, D.K. (1991) On the Methodology of Constructing a Composite Indicator for Political Instability: A Cross-National Study. In: Frantz, R., Singh, H. and Gerber, J., Eds., Handbook of Behavioral Economics, JAI Press Inc., Greenwich, 151-178.