Moots is a high-end bicycle manufacturer located in Steamboat Springs, Colorado.

Question

Moots is a high-end bicycle manufacturer located in Steamboat Springs, Colorado. Assume the company is considering entering the U.K., Chinese, and Indian markets. When conducting its market assessment, what economic factors should Moots consider in making its decision? Which market do you expect will be more lucrative for Moots? Why?

Consider the political, economic, and legal systems of China, India, and the United Kingdom. Explain why you think one country might be more hospitable to Moots than the others.

Explanation / Answer

As we understand the case in which the moot a high-end bicycle manufacturer located in Steamboat Springs, Colorado is planning to expand its market in the U.K., Chinese, and Indian markets, the company has to take a number of economic and political factors into account before concluding a certain decision which are sated as below:-

The taxation policy, investment capital required, political stability and laws will be the first and foremost economic factor to analyze as higher taxes will decrease the profit margin, political instability will add to uncertainty and stringent laws will make the business difficult to execute.

The labor cost will be the second most important factor as higher the labor cost, higher will be the production cost and thus lower will be the profit margin.

As there are three markets , in my opinion, UK can be seen as the most attractive market for the company as the company’s product which is high end bike requires higher buying power of the customers, better roads and infrastructure which are still lacking in India and China.

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