Export Planning How to write an international marketing

Export Planning How to write an international marketing plan Chapter 2: External and Internal Analysis Internationalisation of the firm Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Learning objectives (learning tasks) Ch. 2 At the end of the chapter you are able to: 1. describe a company briefly in terms of its vision and mission, its business definition, and its product lines and markets; 2. explain how to set up an internal analysis by means of its organisation structure, the 7 S-model and its organisational capabilities; 3. explain how to set up an external analysis by means of the DESTEP – and trend - analysis; 4. put together a SWOT analysis and TOWS matrix with its strategic options. Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Vision and Mission Export Planning Example from Kellogg‘s Institute _II_BPM Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Environmental analysis and trend direction DESTEP - analysis D • • E • • S E • • P • • T Export Planning Trend - analyis High Low Conclusion …………… High Low A. Identify the two most Important trends Impacting your business Institute _II_BPM B. Put the two trends in a axis – overview and draw a conclusion Joris Leeman© , 2010

Export Planning DESTEP or PEST analysis The PEST analysis consists of five main steps: 1. Understand a category's relevant trends - research the important variables of the organisation's strategy - determine the long term trends that apply to these variables - research the past behaviour of these variables - analyse the predictability of the trend lines and their fluctuations - assess the impact of these trends on the organisation 2. Understand trend interdependencies - analyse which trends are interrelated - determine which trends conflict by understanding movements in opposite directions 3. Distill likely issues from the identified trends - validate the impact of trends on the organisation - distill the most critical trends that have the greatest impact given the organisation's objectives Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning DESTEP or PEST analysis 4. Forecast the direction of issues - determine the fundamental drivers behind a critical trend - assess the behaviour of the critical trend - run a sensitivity test to assess impact (take -10% of your worst case scenario) 5. derive implications for the organisation - assess the affect of critical environmental changes on the industry - assess affect of critical environmental changes on a firm's competitive position - assess the affect of critical environmental changes on a direct competitor's position - validate a firm's competitive position given the likely positions of its direct competitors' Export Planning Institute _II_BPM Joris Leeman© , 2010

Internal – and External analysis SWOT - analysis Weaknesses Strengths Internal Examples • specialist marketing expertise • exclusive access to natural resources • patent • new, innovative product or service • location of your business • cost advantage through proprietary know how • quality processes and procedures • strong brand or reputation • lack of marketing expertise • undifferentiated product or service (i. e. in relation to your competitors) • location of your company • competitors have superior access to distribution channels • poor quality of goods or services • damaged reputation External Opportunities Export Planning Threats • developing market (for example China, internet) • mergers, joint ventures or strategic alliances • moving into new attractive market segments • a new international market • Loosening of regulations • removal of international trade barriers • a market that is led by a weak competitor • in new competitor in your own home market • price war • competitor has a new, innovative substitute product or service • new regulations • increased trade barriers • a potential new taxation on your product or service Institute _II_BPM Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Internal – and External analysi. S Example SWOT – analysis of Pepsi. Co Strengths Weaknesses Broad product line and outstanding reputation Global market leader in snack foods and non-carbonated beverages (= power and knowledge) Intelligent Logistics network and strong existing distribution channels Inability to leapfrog Coca Cola as being the most famous beverage provider Reliant upon line extensions Reliant upon particular carbonated drinks Opportunities Threats Growing population Progress in technology less costly production processes Spread of liberalisation and democracy across countries Increasing health awareness Ongoing economic crisis Difficulties regarding financing of major projects Source: R. Hüfler a. o. , students HAN University Export Planning Institute _II_BPM Joris Leeman© , 2010

Internal – and External analysis TOWS – analysis: strategic options Internal Strengths (S) 1. 2. 3. 4. Internal Weaknesses (W) 1. 2. 3. 4. Export Planning External Opportunities (O) 1. 2. 3. 4. External Threats (T) 1. 2. 3. 4. SO "Maxi-Maxi" Strategy ST "Maxi-Mini" Strategy Strategies that use strengths to maximize opportunities. Strategies that use strengths to minimize threats. WO "Mini-Maxi" Strategy Strategies that minimize weaknesses by taking advantage of opportunities. WT "Mini-Mini" Strategy Institute _II_BPM Strategies that minimize weaknesses and avoid threats. Joris Leeman© , 2010

Export Planning Chapter review questions (10 min. ) 1. What is an export policy plan? What are three steps of the export policy plan? 2. Create a possible business definition for a brand label manufacturer selling cigarettes. 3. Explain the 7 S Model of Mc. Kinsey. 4. What is a DESTEP – analysis? Why do you apply this analysis on the existing Markets first, before looking at new, foreign markets? 5. What can you do with a SWOT - and TOWS – analysis? Explain and provide an example? Export Planning Institute _II_BPM Joris Leeman© , 2010