CHAPTER 4Gauging Market Potential: How to Spot Trends and Avoid Costly Errors

It’s important to remember that market potential is just a guess; hopefully, it’s an informed guess but, nonetheless, it’s just a guess. Do not let your bias interfere with your decision-making process.

One of the most important parts of assessing market potential is your ability to spot trends that might apply to your products or services. Perhaps the easiest country in which to do this is China because of the specificity of the government’s five-year plans. “After the founding of the People’s Republic of China in 1949, there was an economic recovery period until 1952. Starting in 1953, the first Five-Year Plan was implemented. Except for a two-year hiatus for economic adjustment in 1963–1965, the Five-Year Plans have been continuous. The first five Five-Year Plans feature a Soviet command style economic model characterized by state ownership, farming collectives, and centralized economic planning. The Soviets even helped China craft its first Five-Year Plan.”1 A surprising revelation to those outside of China is that much of the prosperity in China is a result of the five-year plans, designed and implemented by the current president of the People’s Republic of China, Xi Jinping, and the Politburo. The five-year plan covers how they will grow the economy and improve the country over the next five years. This sets the wheels in motion and businesses in China decide how to capitalize on the opportunities ...

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