Strategies for international business

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Strategies for international business

  1. 1. STRATEGIES FOR INTERNATIONAL BUSINESS
  2. 2. FOOD FOR THOUGHTConsider American culture and the typical US citizen who: “begins breakfast with an orange from the eastern Mediterranean, a cantaloupe from Persia, or perhaps a piece of African watermelon. After his fruit and first coffee, he goes on to waffles (cakes made by a Scandinavian technique from wheat domesticated in Asia Minor). Over these he pours maple syrup (invented by Native American of the Eastern U.S. woodlands). As a side dish he may have the eggs of a species of bird domesticated in Indo-China, or thin strips of the flesh of an animal domesticated in Eastern Asia which have been salted and smoked by a process developed in northern Europe. While smoking, he reads the news of the day, imprinted in characters invented by the ancient Semites upon a material invented in China by a process invented in Germany. As he absorbs the accounts of foreign troubles he will, if he is a good conservative citizen, thank a Hebrew deity in an Indo-European language that he is 100 percent American.”
  3. 3. R. Linton, “The Study of Man” (1936)
  4. 4. Take a World View
  5. 5. Small and medium-sized enterprises account for the vast majority (99.87%) of Canadian companies and employ over half (64%) of the labour force as of 2005.But only 1.4% of small businesses export.
  6. 6. How we view the World
  7. 7. 7
  8. 8. HOW THE WORLD VIEWS CANADA
  9. 9. The Canadian Perspective IT WILL DO
  10. 10. The International Response “NO IT WON’T”A personal or Canadian best might not be good enough. “Itstarts with world-class products and services.”William Polushin, McGill UniversityCanadians are missing the boat. We haven’t moved fastenough and used the things we are really good at, like cleantechnology, water purification and green building.”Kathleen Slaughter Dean Hong Kong campus of the Richard Ivey School of Business
  11. 11. BE COMPETITIVE• If you have a so-so “me-too” generic product, inefficient production, poor reliability, no branding, selling the world will be heavy sledding• In fact, the world might pay your competitors a visit…• This is Canada: great education, banks, infrastructure• So be the best, design for manufacture, tool up – if you design out 90% of the labour, eliminate rework, you can compete with low labour cost competitors, win the sales, increase your staff, and have great margins too. Really.
  12. 12. BUILD UP• Be brutally honest in your competitive position.• Focus on your competitive advantage, protect it and build on it.• Build success at home before going abroad.• Focus on one international market introduction at a time.• Use your networks in generating market intelligence but understand their limitations. – Board of Directors – Scientific advisory – Industry associations – Foreign trade commissioners – Canadian consulates
  13. 13. So - You will have to shape up…• QMS ISO 9001
  14. 14. SMALL BUSINESSSUCCESS STORIES
  15. 15. Why Export?It’s a bunch of work:• Languages – agents, brochures, web site,• Time zones – Europe +9, Asia -9, Middle East 12!• Brutal flights• Cultural differences• Competition• Not everywhere is as nice, safe as Canada
  16. 16. Because - Canada is a Limited Market… Canada 2010 GDP $T 1.3 World 2010 GDP $T 74.0
  17. 17. CANADIAN BUSINESS
  18. 18. The Strategy of International BusinessGETEPARED1. Identify Potential Markets2. Choose Best Markets for You3. Can you Compete?4. Determine Appropriate Entry Strategy5. Marketing and Management
  19. 19. A Cheap Peek• Early on attend the likely trade shows of interest -> market and corporate intelligence -> benchmark your products.• Coordinate with trade missions if there is a fit, but don’t rely on this for significant market development.• Be frugal on travel but ambitious in your meetings.• Assume a couple years between first contact in a new market and first sale – need staying power and patience.• Budget for market development
  20. 20. COUNTRY EVALUATION PESTCriteria CriteriaPOLITICAL CHANGE POLITICAL ECONOMIC TAX SYSTEMSPOLITICAL UNCERTAINTY INVESTMENTPOLITICAL DOCTRINE CONSIDERATIONS SOPHISTICATION OF FINANCIAL MARKETS COMMODITY PRICES MONETARY AND FISCAL POLICIES  GOVERNMENT AID INTERNAL REGULATION EXCHANGE RATESRELIGIOUS ACCESS TO BANDWIDTHCONSIDERATIONS SOCIAL TECHNICAL PC OWNERSHIPIMPACT ON LOCAL TECHNOLOGYCOMMUNITIES COMPATIBILITYAVAILABILITY OF JOBS,  TECHNOLOGIES INENVIRONMENTAL IMPACT BUSINESS MANAGEMENTETHICALCONSIDERATIONSCULTURAL ISSUES
  21. 21. IMPORTANT CONSIDERATIONS• LEGAL SYSTEMS – COMMON – CIVIL – THEOCRATIC• CULTURE – HOFSTEDE – Cultural Universals – HALL – High and Low Communication Contexts• ETHICS – DIFFERENT RULES – LEGALLY AND CULTURALLY BASED
  22. 22. COMPANY ANALYSISSWOTS= Strengths InternalW= WeaknessesO= Opportunities ExternalT= Threats
  23. 23. COMPETITIVE ANALYSISFunctions Performance Rating vs. Competition Weak StrongMarketing Company Reputation Marketing Manufacturing Costs Distribution Costs Geographic CoverageFinance Cost of Capital Financial Stability ProfitabilityManufacturing Economies of Scale Facilities Manufacturing CapabilityOrganization Leadership Labour Force Orientation-entrepreneurial
  24. 24. 21
  25. 25. MARKET ENTRYDETERMINED BY• WHICH MARKETS TO ENTER• WHEN TO ENTER THESE MARKETS• SCALE OF ENTRY
  26. 26. MARKET ENTRY STRATEGIES AGENT EXPORTING DISTRIBUTOR LICENSING MARKETING MANUFACTURINGFRANCHISING CULTURALLY BASED REQUIRES STRONG BRANDJOINT VENTURES 1+1=3FOREIGN DIRECT INVESTMENT BECOME LOCAL COMPANY TURNKEY PROJECTS PIGGYBACKING
  27. 27. MARKETING STRATEGY ISSUESPRICE  PRICE DISCRIMINATION  STRATEGIC PRICING  REGULATORY PRICINGPROMOTION  CULTURAL DIFFERENCES  AVAILABILITY OF MEDIAPRODUCT  CULTURAL DIFFERENCES  ECONOMIC DEVELOPMENT  PRODUCT AND TECHNICAL STANDARDSPLACE  LENGTH / WIDTH OF DISTRIBUTION CHANNELS  DEGREE OF MARKET CONCENTRATION
  28. 28. MARKETS WITH POTENTIALSOUTH EAST ASIALATIN AND SOUTH AMERICAEASTERN EUROPEDUBAI AND REGION
  29. 29. Growth Rates
  30. 30. WHAT ABOUT CHINA AND INDIA?
  31. 31. POTENTIAL EXPORTS• Medical & Dental Equipment,• Wastewater Treatment Equipment & Chemicals,• Oil & Gas Production & Exploration Equipment,• Food and Agribusiness• Infrastructure Development• Heavy Construction Equipment,• Advanced Manufacturing• Financial Services• Digital Media and Software• Aerospace and Aviation• Electrical Power Generation & Transmission Equipment,• Prefabricated Housing and other Building Products• Education• Life Sciences• Energy and Energy Technologies• Environmental Products and Services• Retail and Franchising
  32. 32. INNOVATIVE MARKETING STRATEGIESINNOVATION SHOULD BE THE CORE OF YOUR STRATEGY MARKETING SHOULD BE YOUR DRIVING FORCE
  33. 33. SELL THE MARKET WHAT IT WANTSPROCESS DELIVERED IN IRAN RESIDENCIES AND ON-LINE QUALITY CONTROL MARKET DRIVEN PRICING PARTNERSHIPRESULTS YEAR 1 – 34 MBA STUDENTS YEAR 2 – 46 MBA STUDENTS YOU CAN GET THERE FROM HERE MARKET PENETRATION ENHANCED REPUTATION
  34. 34. MARKET THE FUTUREPROCESS FROM R&D TO MARKETING FOCUS MARKET DRIVEN PRODUCT DEVELOPMENTRESULTS MULTIPLE INTERNATIONAL MARKETS AND SECTORS “GREEN" TECHNOLOGY LEADER AVERAGE ANNUAL GROWTH CHANGING THE WAY THE WORLD THINKS ABOUT LIGHTING RATE OF 68%
  35. 35. MARKET A REVENUE MODELPROCESS IDENTIFIED A NICHE DEVELOPED USER FRIENDLY SOFTWARE BUILT ALLIANCESRESULTS WORLD’S LARGEST ON-LINE MARKETPLACE FOR BOOKS 70 MILLION BOOKS OFFERED BECAUSE YOU READ 13,000 BOOKSELLERS IN 48 COUNTRIES
  36. 36. MARKET YOUR PASSIONPROCESS DEVELOPED A REALISTIC MISSION BUILT TECHNOLOGY THAT WORKED IDENTIFIED MARKETS THAT UNDERSTOOD THE MISSION PROVIDE STRONG AFTER SALES SERVICERESULTS VARIED PRODUCT PORTFOLIO BUILT AROUND THEIR MISSION MULTIPLE MARKETS 2004 BC EXPORT AWARD EMPOWERING LEARNING THROUGH TECHNOLOGY
  37. 37. USE THE WEB • Information • Research • Cultural Intelligence • Networks • Contacts • Partners • Marketing • Customers
  38. 38. TRADITIONAL MEDIA ON-LINE
  39. 39. Professional Networks and Blog Platforms
  40. 40. BUSINESS NETWORKS
  41. 41. SOCIAL NETWORKINGEUROPE WORLD
  42. 42. KEY SUCCESS FACTORS• Marketing research quality• Local partnerships• Product adaptation• Recognise differences between each country in a region• Who you know• Be customer driven• Understand the cultures• Take a long-term view of market
  43. 43. FOOD FOR THOUGHT• Research. Plan. Implement!• Get Connected.• Pick on someone your own size.• Find and develop a partner.• Its better to succeed in two markets than to fail in 10.• Dont be arrogant.• Adjust your attitude when you go overseas; dont assume your reputation precedes you.• Think guerrilla. Strategize accordingly.• Be selective. Select the partner and market, not the reverse.• Change your mind-set. Think market, not geography.• Resist the familiar. Be conscious of your biases,• Learn foreign countries perceptions of "fair play."
  44. 44. A FINAL THOUGHTEvery morning in Africa, a gazelle wakes up.It knows it must run faster than the fastest lion or it willbe killed.Every morning a lion wakes up.It knows it must outrun the slowest gazelle or it willstarve to death.It doesn’t matter whether your are a lion or a gazelle.When the sun comes up, you better start running.- African ProverbSource: Friedman, Thomas L. The World is Flat
  45. 45. RESOURCES https://trade.britishcolumbia.ca/Buy/BCBusinessNetwork http://www.gov.bc.ca/tti http://www.tradecommissioner.gc.cahttp://www.fitt.ca
  46. 46. THANK YOU
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