Entering the CIS market for export

Screening ,Selection and Choosing Entry Mode; (The case of European CIS countries) Maliheh Ghadiri, Habib Ramezanzadeh, Kaveh Yazdifar, Haleh Hamedifard, Group 6

Key globalization decisions

Decide whether to enter :

Deciding on going international market or not

Decide which markets to enter

Screening country markets

Selecting country markets

Decide how to enter

Choice of entry mood

Deciding entry timing

Plan marketing programs

Deciding on marketing plan

IM Strategy Process & Our Focus Understand the environmental influences on a firm’s international markets Segment international markets, identify & analyse opportunities Develop appropriate international marketing strategies, planning & processes Decide marketing entry strategies Build added value through effective marketing mix strategies Feedback & reassess continually

1-Why expand internationally?

limited domestic market opportunities

enjoying economies of scale/global volumes

leverage the competencies of the firm

stake holder's expectations

2-1-Screening country markets

Assess the External Environment of each country

PEST Analysis(political, economical, Social, Technological)

Assess the Firm’s Competences & Competitive Power (Internal analysis)

Market knowledge, Porter’s 4P (product, price, place, promotion)

Selecting country markets

External Environment

Competitive Position

2-2-Selecting country markets Market Environment Competitive Position Russia 4.67 3.95 Ukraine 3.37 2.9 Georgia 2.63 2.73 Belarus 3.61 2.61 Moldova 1.73 2.3

Market Attractiveness Matrix 5 1 1 5

Attractiveness Results Country Attractiveness ch4_6 5 1 1 5 1.7 3.3 1.7 3.3 Russia Ukraine Georgia Belarus Moldova

Market Segmentation Country Markets Select Prioritize Analyze Approximately 210 countries European CIS countries

3.Entry Mode Options

Exporting

Contractual Agreements

Foreign Direct Investments

Internationalization Process ?

Entry Modes: A Decision Framework How high are Transport costs? Can Know-how be licensed Is tight control required Can know-how be protected by licensing contract Export Investment Entry or JV Then License Low High No yes yes Yes No

The Internationalization Stages

Internationalization Stages

Stage 1 – Indirect exporting, licensing

Stage 2 – Direct exporter, via independent distributor

Stage 3 – Establishing foreign sales subsidiary

Stage 4 – Local assembly

Stage 5 – Foreign production

Marketing and direct sale of domestically-produced goods in another country. Does not require that the goods be produced in the target country. No investment in foreign production facilities is required. Low risk of investment Why Exporting?

Modes of Entry Cost Risk Exporting Licensing Franchising Joint Venture Wholly Owned Subsidiary Low High High Acquisition In general, there is a cost/control tradeoff in choosing which mode of entry to use.

4.Deciding entry timing