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# which market to enter?

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You're the manager of global opportunities for a U.S. manufacturer, who is considering expanding sales into Asia. Your market research has identified the market potential in Malaysia, Philippines, and Singapore as described next:

Success Level
Big Mediocre Failure
Malaysia
Probability 0.3 0.3 0.4
Units 1,200,000 600,000 0

Philippines
Probability 0.3 0.5 0.2
Units 1,000,000 320,000 0

Singapore
Probability 0.7 0.2 0.1
Units 700,000 400,000 0

The product sells for \$10 and has unit costs of \$8. If you can enter only one market, and the cost of entering the market (regardless of which market you select) is \$250,000, should you enter one of these markets? If so, which one? If you enter, what is your expected profit?

#### Solution Preview

Success Level
Big Mediocre Failure Probable Units sold X profit - costs = net profit
Malaysia
Probability 0.3 0.3 0.4
Units 1,200,000 600,000 0
360,000 + 200,000 = 560,000 X \$2 = \$1,120,000 -\$250,000 ...

#### Solution Summary

The author shows how to determine which market to enter by using outcome probabilities.

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