Author Question: Factor proportions theory was developed by ________. A) Smith and Ricardo B) Ricardo and Ohlin ... (Read 134 times)

burchfield96 · **on:** Jul 7, 2018

Factor proportions theory was developed by ________.

A) Smith and Ricardo
B) Ricardo and Ohlin
C) Heckscher and Ohlin
D) Heckscher and Smith

Question 2

Compare and contrast industry market potential and company sales potential. How is an estimate of industry market potential helpful to managers? What factors are necessary to determine industry market potential?

What will be an ideal response?

braelync · **Reply #1 on:** Jul 7, 2018

Answer to Question 1

C

Answer to Question 2

Industry market potential is an estimate of the likely sales for all firms in a particular industry over a specific period. It is different from company sales potential, the share of industry sales the focal firm itself can expect to achieve during a given year. Most firms forecast both industry market potential and company sales potential at least three years into the future.
Estimating industry market potential enables the researcher to refine the analysis and identify the most attractive countries for the firm's product or service, as well as gain industry-specific insights and understand how the firm needs to adapt its product and marketing approaches. To estimate industry market potential, managers obtain data and insights on the following variables for each country:
Size and growth rate of the market and trends in the specific industry
Tariff and nontariff trade barriers to market entry
Standards and regulations that affect the industry
Availability and sophistication of distribution for the firm's offerings in the market
Unique customer requirements and preferences
Industry-specific market potential indicators
In addition to generic determinants of demand, each industry sector-from air conditioners to zippers-has its own industry-specific potential indicators or distinctive drivers of demand.
Company sales potential is an estimate of the share of annual industry sales the firm expects to generate in a particular target market. Arriving at it is often more challenging than earlier tasks, because the researcher typically needs to obtain highly refined information from the market and make some fundamental assumptions to project the firm's revenues and expenses three to five years into the future. These estimates are never precise and require quite a bit of judgment and creative thinking.