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Expanding internationally

National Markets

Create visions and aims

What is the aim of the company for the next 5-10 years?

This type of planning includes international competition and the future market trends. It initiates identification and motivation.

The Balanced Score Card

Helps to develop visions and strategies for achieving objects

insular expansion

financial

internal

Visions should be:

concentric expansion

develop guidelines

selective expansion

develop VISIONS

• companies choose countries with leading character (market growth, innovations)

• placed over strategy
• shows financial success

• processes of net product, Output and order processing

• realistic
• realizable
• long-term
• unique

• concentric expansion
• increase of distribution area in stages
• choose attractive market segments and extend them circularly

they generate the "islands" and are starting point for later expansions

• guidelines committed for the whole company
• simple, short, concise
• communicable for internal and external business environment

• seperate markets and their core areas will be choosed and processed
• for companies of global industries

"Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth.

People: Be a great place to work where people are inspired to be the best they can be.

Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities.

Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities."

Point out your position of success

What are your strength and skills?

How can you use them as a competitive

advantage?

http://www.coca-colacompany.com/our-company/mission-vision-values

customer

Marie Erbes & Anne Bierau

08.05.2013

Seattle, Portland, Vancouver

USA, Brazil, Japan

Singapore, Malaysia

4 Monitoring

Where?

learning

• satisfaction
• canvassing
• customer value

• potential of employees and managers
• motivation
• training

2. Analyse the countries

http://sterlingstrat.com/wp-content/uploads/2012/12/Balanced-Scorecard-Graphic.jpg

http://www.maximator.de/flycms/de/web/15/-/Vertrieb+weltweit.html?SID=nhdjRYTc5a3e

Marie Erbes & Anne Bierau

08.05.2013

Managers have to reflect:

• Which improvements were made?
• Which strategic measures were implemented? Are they successful?
• Where are our weaknesses?
• Where are the most dangerous risks? How can we react?
• in- and external feedback

get information about possible risks (political risks service ranking)

rate market attractivness (volume, growth and structure of the market)

analyse barriers for market entrance (customs, taxes, langauges, culture)

5 Change Management

• supervising, rating and improving of the 5 steps
• intervise the internationalisation in culture of company
• intercultural training and communication for employees
• important for international success

Marie Erbes & Anne Bierau

08.05.2013

important factors:

business environment

market potential

sales potential

product spezification

Pegasus Footwear-Trampling on religion

SWOT Analysis

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http://rudocs.exdat.com/pars_docs/tw_refs/134/133099/133099_html_5488121d.jpg

develop a "Cluster of Countries"

Allah in Arabic

Pegasus Shoe Design

Strategic planning

Marie Erbes & Anne Bierau

08.05.2013

Which market to choose

Internationalization decisions

Why Expand internationally

Factors for Market entry

• Gain access to new customers

• Achieve lower costs and enhance competitiveness

• Spread business risks across a wider market

• Economies of scale

• Enhance knowledge

• Macroeconomic conditions (e.g. inflation)

• Political environment

• Infrastructure (e.g. trade barriers or transport)

• Cultural norms and social structures

• Political & legal risks (e.g. Corruption,

Protection of intellectual property)

• Security risk

1. which international market

to choose

2. How to enter these market

3. How to offer services and products

tntech.edu

last point and result of business analysis

helps to develop strategic measures and facilitate your purpose

taregt-actual comparison

1. Business Analysis

Marie Erbes & Anne Bierau

08.05.2013

Market entry strategies

Marie Erbes & Anne Bierau

08.05.2013

Business Analysis

Evaluate your company from the Inside-out and the Outside-in.

How to enter new markets

Exporting disadvantages

Exporting

The selling of goods and services produced in one country in another country

Advantages

• Relatively low-cost activity
• Create economies of scale which should lead to lower cost
• Low risk

• Exporting

• Licensing

• Franchising

• Direct investment

• Strategic Alliance

• Joint Venture

• Lower profit potential
• Loss of control over marketing
• Lack of feed back from market
• Identifying suitable agent/distributor
• Agency agreements of agent
• Transportation cost

Outside in

• analyse the environment of your company
• Where are possibilities, where are barriers when you enter the market?
• Who are the competitors?
• Which products and prices do they offer?
• Which marketing strategy do they use?

Inside out

• point out your strength, weakness, resources and problems
• figure out your skills
• consider all departments

Marie Erbes & Anne Bierau

08.05.2013

It is very important to collect as much information as possible! Usefull links:

Market entry strategies

Licensing

Franchising

Licensing means, to provide limited rights on patented products, methods etc., for foreign companies

Franchising is the practice of using another firm's successful business model.

5 Steps for a successful expansion

Marie Erbes & Anne Bierau

08.05.2013

• EG. McDonalds. KFC, Hilton Hotels, Holiday Inn

• Useful when a firm has neither the resources or capabilities to directly enter foreign markets

Example

Advantages

Disadvantages

• Rapid entry and market penetration
• franchisee bears the costs & risks of establishing in foreign locations
• Franchiser bears costs of training, support and monitoring

• Rapid entry to foreign markets
• No large capital investment
• Trade barriers

The big problem the franchiser faces is maintaining quality control, standards and consistency

• Creates a competitor
• No control over licensee and product

1. Business analysis

2. Analysis of the countries

3. Strategic planning

4. Monitoring

5. Change management

Marie Erbes & Anne Bierau

08.05.2013

Ways to offer products and services

Standardization and Differentiation

Marie Erbes & Anne Bierau

08.05.2013

To be successful on the international market, the company has to decide in which way they wanna offer their products and services.

To expand or not to expand?

Standardization

Differentiations

hi paul!

• is the process of distinguishing a product to make it more attractive to a particular target market
• differentiate a product from competitor products as well as a firm own product offerings.

• way of agreeing on technical issues and processes.

• Product standardization is an efficient method to reduce costs and increase quality. By minimizing the differences in your products

Risks

• less information
• high financial charges
• difficult process of organization
• sales potential

Marie Erbes & Anne Bierau

08.05.2013

Die Form und der Pfad müssten noch editiert werden :)

Conditions

Discussion

Relocation of factories: German companies barely flee abroad

• right timing
• tap potential of domestic market
• information about competitors
• weigh the odds

Marie Erbes & Anne Bierau

08.05.2013

In Germany get factories closed and build up in countries with low wages: that was many years the standard recipe of many German companies. But this trend has largely stopped, according to SPIEGEL information - because displacements often are no longer economical.

German companies push it hardly abroad. Between 2010 and 2012, the rate of those companies that reduce the production capacity in Germany to reinstall them elsewhere fell to eight percent.

The German economy is still global presence, since 21 percent of production capacity German companies are located abroad. The sharp decline in building up new companies abroad is justified by the "diminishing benefits" through low wages abroad and poorer quality.

Marie Erbes & Anne Bierau

08.05.2013

Sources

• Bradley, Frank (2002): International Marketing Strategy, Fourth edition, Harlow
• Derboven, Wibke/ Krumbruck, Christel (2005): Interkulturelles Training, Trainingsmanual zur Förderung interkultureller Kompetenzen in der Arbeit, Hamburg
• Hodgetts, Richard M./ Rugman, Alan M. (2000): International Business, A strategic management approach, Second edition, Harlow
• Rarick, Charles A. (2003): Cases and Exercises, International Business, New Jersey
• Sachse, Uwe (2003): Wachstum durch internationale Expansion, Wiesbaden
• http://info.sms.uni.edu/blog/bid/157313/3-Global-Target-Market-Strategies
• http://thembanotesforyou.blogspot.de/2011/06/definition-of-international-marketing.html
• http://spon.de/adT7z
• http://www.coca-colacompany.com/our-company/mission-vision-values
• http://www.ehow.com/way_5379387_product-standardization-strategy.html
• 3 Global Target Market Strategies