How to do foreign market feasibility studies cost effectively?

Yesterday I wrote a post introducing an alternative approach to internationalization. The idea behind the model was to develop an actionable practical model that could be used by anyone without detailed knowledge on international marketing. As you would recall I explained the first two areas of the model yesterday in the same post. I'm going to look at the third element 'Market Feasibility' in todays post. 

Market feasibility is a big stumbling block in internationalization process for many firms. Most often companies decide to hire external consultants due to their lack of knowledge of the foreign markets. Whilst this is a prudent approach, it is not the most cost effective method and many firms are put off by the costs involved. However, I believe a firm can do a decent market feasibility study for their potential foreign market with clever use of research agencies and internal marketers without the use of big consulting firms. Lets look at how they could go about doing this. 

The main principle behind any market feasibility study should be collecting the information that's needed rather than collecting all the information. Therefore, what's needed by one firm will greatly differ from that of another. I've summarised the typical information needs that exist within the market feasibility phase into the following. As you can see, I have borrowed well known concepts but brought them together into three different layers. The idea behind the layered model is to suggest that a firm should start their market feasibility from outer layer going into the market estimation last. This will allow a firm to abandon market feasibility for any potential foreign country should the broad indicators are not promising. 

I have clearly separated the macro environment from the rest for one simple reason. We cannot change the macro environment therefore I wouldn't recommend spending any money behind any detailed analysis. Instead what's needed for a small firm operating in a non-complex market will certainly be available in the public domain. Most of the countries nowadays have their department of statistics online offering detailed macro environmental information. 

The majority of cost will come from the operating environment analysis and market estimation analysis. The key to both these areas is select what's exactly needed for our firm as opposed to getting all the information. For an example, an online business that has no intention or resources to carry out a comprehensive TV advertising campaign could avoid collecting competitor marketing spends under the marketing environment heading. Yes, this would mean working with limited information. There is no point in knowing all the information if you cannot act on them. Therefore, my key suggestion is to take a long hard look at what's needed minimally before going about market feasibility. 

A good feasibility study will collate all the relevant information from the three areas identified, to form a coherent picture of the potential new market. Such a study should highlight the key concerns, opportunities, a firm’s potential in the new market and critical success factors allowing the senior management of the firm to make the decision to enter a potential foreign market or not.

I hope this gives you basic idea of how to carry out a market feasibility study on your own for any potential foreign market that your firm intends to operate. I will be more than happy to expand any of the ideas I've discussed here if any of you are interested.