EFRAN - Niha 27 April 2010

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Presentation given by Bertrand VIALA at NIHA Ankara to Undergrad students of Bilkent University

What does the Reverse Innovation theory tell us about business entry strategies in emerging markets

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EFRAN - Niha 27 April 2010

  1. 1.
  2. 2. INNOVATION<br />AND EMERGING MARKETS<br />
  3. 3. PRESENTATION<br />OUTLINE<br /><ul><li>WHO WE ARE
  4. 4. GROWTH, INNOVATION AND EMERGING MARKETS
  5. 5. EMERGING MARKETS : A CHANGING PARADIGM
  6. 6. THE LINK BETWEEN INNOVATION AND EMERGING MARKETS
  7. 7. HOW TO OPERATE ?
  8. 8. CONCLUSIONS</li></li></ul><li>WHO ARE WE?<br />
  9. 9. Bertrand VIALA<br />French citizen raised in Germany<br />Focusedon emergingmarketsandinnovation - stronggovernmentrelationsandbusinessintelligence background.<br />Governmentrelations in thefields of <br />IT, HomelandSecuriy (Identification, surveillance), Defence (UAVs, optronic), Biotech, Nanotech<br />over 5 fiveyears of businessexperience in Turkeyforworldwideplayers<br />5 yearsexperience at theFrenchandGermanMinistry of Defense<br />Lobbyingexperience in DC - staff at theHouse of Rep / Consultant at variouslobbyinginstitutions<br /> <br />Education: <br /><ul><li>McGillUniversity , MA PoliticalScience, Canada - 2000
  10. 10. Institut d EtudesPolitiquesAix-en-Provence, MA, France- 1998
  11. 11. UniversitaetKonstanz, Politikwissenschaft, ECT, Germany, 1996</li></ul>· Fluent in Turkish, German, English<br />Senior Business Development Specialist<br />Managing Partner <br />EFRAN INTERNATIONAL CONSULTING<br />
  12. 12. We are located in Ankara<br /> We also have a network of permanent world class <br /> EFRAN CONSULTING correspondents that work in business development projects on a regional base in: <br />· New Dehli – India<br />· Abidjan – Ivory Coast, <br />· Rabat – Morocco <br />· Baku – Azerbaidjan<br />A project extending: <br />·Turkmenistan ·Mongolia· Ethiopia ·Tunisia · Malaysia<br />
  13. 13. OURJOB<br />BusinessDiplomacy<br />Economic/competitiveIntelligence<br />Market PenetrationProject<br />GROWTH<br />MarketingStrategies<br />
  14. 14. Whatdoes ‘growth’ meanfor a company?<br />Whatwould be a ‘growthcompany’? <br />
  15. 15. Any firmwhosebusinessgeneratessignificantpositivecashflowsorearnings, whichincrease at significantlyfasterratesthantheoveralleconomy. A growthcompanytendstohaveveryprofitablereinvestmentopportunitiesforitsownretainedearnings. Thus, it typicallypayslittleto no dividendstostockholders, optinginsteadtoplowmostorall of itsprofitsbackintoitsexpandingbusiness. <br />Investopedia (ForbesCompany)<br />IDEAL – Exple : GOOGLE<br />
  16. 16. GROWTH<br />New Customers<br />New / UpdatedProducts<br />R&D<br />Marketing<br />EmergingMarkets<br />Innovation<br />
  17. 17. THE SECOND WORLD<br />ParagKhanna<br />
  18. 18. EMERGING MARKETS : A CHANGING PARADIGM<br />TYPICAL FORM OF INTERNATIONAL TRADE STRUCTURE IN 20th Century<br />DevelopedMarkets<br />Spinoffproducts<br />NaturalandAgriculturalResources<br />Non- Solvability<br />No MiddleClass<br />FinancialpowerTechnology<br />Intrazonetrade<br />EMERGING MARKETS<br />NaturalandAgroResources<br />3rd WorldMarkets<br />
  19. 19. TheRiseof EmergingMarkets<br />Maincharacteristics<br />Competition at homeandforeignmarkets<br />Ownindustrialcapacity<br />A lot of needsto be dealtwith<br />Changingbalance of power<br />Majordisruption<br />Goinguptheladder of conceptionanddesign of products<br />Morecompetitive<br />Capacitytoinfluenceandgenerateinnovationprocesses<br />Expandingmiddleclasswithincreasingpurchasingpower<br />Moreadaptedtonewtypes of customers<br />
  20. 20. INNOVATION SEARCHING FOR DISRUPTION<br />
  21. 21. Innovation<br />MainConcepts<br />What is innovationabout?<br />Revolutionary<br />DisruptiveInnovation<br />(Christensen)<br />‘Seizethewhitespacebeyond’ (Mark W. Johnson)<br />R&D investment<br />Evolutionary<br />New Marketing Strategies<br />New business model<br />‘CrossingtheChasm’ (Geoffrey A. Moore’s)<br />What is theprocess at work?<br />Market anddiffuseyourinnovation<br />Growth<br />ROI<br />
  22. 22. TheReverseInnovation Model – Jeffrey R. Immelt, VijayGovindarajan, ChrisTrimble<br />Heavyinfrastructure<br />Originalproduct<br />POOR SALES<br />Highcost<br />Readapttothe market<br />Design a lowcost – moreuserfriendly – lighterdevices<br />New product<br />NEW MARKET OPPORTUNITY<br />EMERGING MARKET<br />MATURE MARKET<br />PROSCONS<br />Doesntreflecttotallytheevolvingsituation of marketsthemselves - whendoes a market stop to be emerging?<br />.<br />Link betweenemergingmarketsandinnovation<br />Localadaptationcostsandrisks – IP rights, heavyregulations, <br />Example: GOOGLE in China<br />Providesinsightabouthowtomaximize market penetration<br />Doesntdetailthecost of reintroducingyourproduct in themature market – especiallyadaptationtoqualitystandards.<br />
  23. 23. HOW TO OPERATE?<br />Differentthantrading<br />MORE COMPLEX THAN DELOCALIZATION<br />Backtohome market<br />LocalMarketing<br />ImplementationPhase<br />Project Designphase<br />SPECS<br />Salesand marketing teamslocallymanaged<br />Findinglocal/foreignpartnersforproductionand marketing<br />Readaptation of marketing<br />Internal R&D team<br />MarketingStrategies<br />Qualitycontrolandstandards<br />Analysisandresearch on target market<br />Local R&D team<br />Costs can be reducedbytheuse of Web2.0 applications + Ecommerce + Utrade<br />Set upmanagementteaminternally<br />Competitiveintelligence<br />BusinessDiplomacy<br />
  24. 24. CONCLUSIONS<br />BUT LET’S BE PRAGMATIC<br />DEVELOPMENT OF NEW FORMS OF MARKETING MAKE THESE OPPORTUNITIES OPERATIONAL<br />INNOVATION IS STILL A LEADING FORCE IN MATURE MARKETS<br />EMERGING MARKETS ARE THE WORLDS GROWTH POTENTIAL<br />INTERACTION WITH EMERGING MARKET HAVE STRONG RISKS AND COSTS – ESPECIALLY FOR SMES<br />Howeverenthusiatic an idea extensiveresearchandrisk assessmentis a priority<br />ACCESS TO NEW MARKETS IS A STRONG INCENTIVE FOR INNOVATION<br />
  25. 25. Dikkatınız için teşekkür ederim<br />Thankyouforyourattention<br />Merci de votreattention<br />

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