Export Planning How to write an international marketing

Export Planning How to write an international marketing plan Chapter 3: Business Strategy and 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. 3 At the end of the chapter you are able to: 1. understand how business strategy and export policy are linked together; 2. describe the competitive environment of a company with Porter’s 5 forces model; 3. outline a company’s growth strategy in terms of Ansoff and Hamel & Prahaled; 4. explain a company’s product assortment in terms of its product life cycle and BCG matrix; 5. describe three competitive strategies of Treacy & Wiersema and its accompanying value proposition; review the ways towards a competitive advantage based on Ohmae. Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Strategic questions for a company • How does the organisation wants to grow in future? • How do you react to your competitors? • What are your core competences and how do you create a competitive advantage? • How do you manage the different product lines? Export Planning Institute _II_BPM Slide 11 Joris Leeman© , 2010

Export Planning Development of a strategy Existing Strategy Product / Service Portfolio Trends Analysis Future Strategic Positioning Strategic Models DESTEP Export Planning Institute _II_BPM Slide 9 Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Example of Porter‘s 5 -forces for Pepsi. Co Ø Pepsi. Co has to face huge rivalry between its competitors as well as threads on the demand-side. New entrants § Current economical crisis little incentive to invest in new markets Buyers Suppliers § Global raw material sourcing possible § Suppliers are replacable § Pepsi. Co = big customer with high bargaining power Rivalry § Strong rivalry in all markets § Global average market shares - Coca Cola: 43, 7% - Pepsi. Co: 31, 6% - Cadburry: 15, 8% § High bargaining power Few large wholesale and retail businesses § Pepsi. Co is fully dependent on providing products that meet customer demands and trends Threats of substitutes § Rising health awareness and therefore risk of low switching behaviour § Low product differentiation Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Ansoff – Growth model Product / Market – combinations for growth Capability organisation? Process Innovation (ICT) New Product Innovation Diversification Penetration Market Development Product Reaction Competition? Current Organisation? New Market Export Planning Institute _II_BPM Slide 11 Joris Leeman© , 2010

Export Planning Core competences – model of Hamel & Prahaled The battle to ‘master‘ four core competences Four battles to ‘master‘: • Resources • Capabilities • Competitive advantage • Strategy New The best in 10 year’s time Super chance Open spaces White spaces Core Competences Current New Market Export Planning Institute _II_BPM Slide 11 Joris Leeman© , 2010

Export Planning BCG – matrix for product portfolio management Boston Consultancy Group - matrix High ? Stars Questionmarks Cows Sleeping dogs Market growth Low Large Small Relative market share Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Exampe of a BCG – matrix for Danone Sales by product line Fresh dairy Baby nutrition water Medical Nutrition shows highest potential in the future Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning GE / Mc. Kinsey – matrix for product portfolio mgt H Market attractiveness - Market size - Market share - Growth direction - Positioning PLC M INVEST / GROW L SELECT / REVIEW HARVEST / DIVEST H M L Competitive strength of SBU Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Porter‘s generic competitive strategies Competitive advantage Broad target Cost leadership Differentiation Cost focus Differentiation focus Lower cost Differentiation Competitive scope Narrow target Export Planning Institute _II_BPM Slide 11 Joris Leeman© , 2010

Export Planning Institute _II_BPM Joris Leeman© , 2010

Export Planning Treacy & Wiersema‘s competitive strategies (Operational Excellence) Standardized product or service * Limited, everybody is treated same - service Relative low price * Easy to get by the customer (Best Product) State-of-the-art product or service * New type of product or service Premium price * Can be acquired fast by the customer (Customer Intimacy) Total solution for customer * Tailor made set up for customer Premium price * Provide data to the supplier 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 Chapter review questions (10 min. ) 1. What model can you use to describe the competitive environment? What three competitive strategies have been derived from that? 2. What model can you use to define how a company can grow? 3. Name two product portfolio management models. Explain both models. 4. Explain the BCG matrix. Explain the GE matrix. Do you think the GE matrix is better than the BCG? If yes, why? Motivate your answer. 5. What is meant with a value proposition? Explain the four elements of the value proposition and present its three value disciplines or competitive strategies. Give an example of each competitive strategy. 6. What is customer based strategies and corporate based strategies? How does this relate to the strategic ways Ohmae developed to create a competitive advantage? Export Planning Institute _II_BPM Joris Leeman© , 2010