Sail the 7Cs to Grow Your International Business

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Sail the 7Cs to Grow your International Business …

Sail the 7Cs to Grow your International Business

Dermott Dowling, Founding Director @Creatovate and Patrick Tully, Partner @Fusion Learning share some insight into their 7Cs ‘critical thinking’ framework to break down the challenge of where, when and how to create, grow and sustain an International Business.
For many businesses and business owners change can feel both exciting and challenging, and for some it feels downright daunting. However, what is universally true is that business growth without change is very difficult to achieve and for many businesses the most effective form of growth and change is expansion into new markets or geographies.
The journey to extend into other markets can, in its infancy, seem overwhelming particularly for small and medium sized ventures that are highly dependent on their domestic success. However, like any journey, the provision of a route-map and a travel guide can both shed light on the destination and map out the pathway to getting there. This is the purpose of our 7Cs framework, to help structure, plan and build rock solid foundations for a strategy for expansion into Asia and beyond. Think of it like planning a journey across the Seven Seas from the safety and security of the home port before you set sail into the unknown beyond your home borders.
1. Challenge

The 7Cs framework includes a wide range of processes and tools that enable us to strive for the extra-ordinary. Our ability to deliver, however, is founded on the first, critical step – setting ourselves an extra-ordinary challenge.
2. Country
Once you have set your business challenge and aligned your company and leaders internally around the opportunity to internationalise your business your attention immediately turns to where?
3. Category
Having decided on the country or countries we are aiming to enter we need to understand the category or categories from which we want to source our business.
4. Competition or Collaboration
Competition in the new market(s) your business enters is highly likely to be different to your home market. Working out where to compete and how to collaborate is vital.
5. Consumer
The ultimate custodian of success or failure in any geography is the consumer of our product or service – if they don’t connect with and continue to consumer our offer then we are doomed to failure.
6. Customer

Overlooked in so many case studies in the race to understand the preceding 5Cs and get your product or service out the door, many businesses miss the opportunity to get an early ‘Voice of the Customer’ in their International Business strategy creation and implementation.
7. Competencies
Having spent time looking at the external context in the preceding 6Cs the time has now come to start looking inwardly to identify the strengths and opportunities you can leverage to guarantee your success.

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  • 1. Sail the 7Cs to Create an International Business Edited Version: Delivered by Patrick Tully (Fusion Learning) & Dermott Dowling (Creatovate) @ Mondelez International Asia Pacific Innovation Centre, Ringwood Wed 13th Nov 2013
  • 2. Introducing patrick tully Patrick leads fusion learnings Asia Pacific team. His branding and international marketing career has spanned over 20 years. He started his client-side career at Diageo, working on brands as diverse as Gleneagles and Guinness and then moved into the wonderful world of whisky as Global Brands Director on Malts. After 10 years client side, Patrick spent 6 years as a Managing Partner in a brand consultancy specialising in innovation and strategy working across a broad range of categories for a diverse set of clients including: American Express, Bacardi Martini, Mars, Cadbury, Nestle and A-B InBev amongst others. Patrick joined fusion learning seven years ago to help extend the business into Asia Pacific and has since built up a team in Sydney that works with a very broad range of global and local organisations from Heinz to Henkel and from Bulla to Beiersdorf. The team have helped delivered capability and consultancy programmes to help businesses unlock the potential of their brands by unlocking the potential of the people that look after them
  • 3. Introducing Dermott @ Innovation & International Business Consultant Dermott Dowling is founding Director @Creatovate Innovation & International Business Consultancy. Dermott has over 16 years experience building international brands and businesses in Asia Pacific with time spent building brands at world leading multinationals including Fonterra, Foster’s and Lion Dairy & Drinks. Dermott believes the only sustainable business growth is organic, driven by innovation and international business development. Lecturing and tutoring International Business @Swinburne University in addition to helping clients grow, Dermott works with a diverse range of clients from fast growing multinationals to independent family owned businesses.
  • 4. 1) Challenge create focus 2) Country 7) Competencies know your strengths 6) Customer create context Opportunity Canvas 3) Category cater to your key partner identify codes 5) Consumer 4) Competition know your target find white space
  • 5. 1st C: Challenge: create focus and alignment ■ The purpose of the challenge statement is to help us set course for the journey ahead ■ In essence the challenge must act as our compass – providing direction without forcing a path on us ■ Ultimately the challenge statement set’s out the end in mind, what are you specifically trying to achieve? ■ It helps provide us with a clear purpose around which to focus our data and information search and around which to align the entire organisation ■ An impactful challenge must be prioritised, provocative and precise – hence we have a very clear structure that helps us achieve this….
  • 6. 2nd C: Country – Where to 1st? 2nd? 3rd? Start by creating a strategy with “Where” front and centre …use objective measures like a Market Opportunity Index© to take bias out of your strategic choices on “where to go” first 1 3 7 11 4 10 2 5 8 >500 <50 51-200 201-500 500+ US$/Kg Total Market <$2 $2-3 $3-4 $4+ Consumption/capita Kg cup <0.1 0.1-0.5 0.5-1 1+ Cup Yogurt CAGR (Growth)% Value US$ <1% 1-5% 6-10% 10+% <10% 11-45% 46-90% 10 10 0 10 10 4 4 4 7 4 7 10 10 4 4 4 0 4 4 7 4 4 7 7 7 7 7 7 0 10 10 10 10 10 0 4 10 10 0 0 0 0 0 0 10 4 4 0 4 4 4 0 10 0 0 0 4 0 0 4 10 4 4 4 4 4 4 4 7 0 4 4 4 4 4 4 4 7 7 7 4 4 4 0 4 0 10 7 0 0 0 4 7 4 4 4 0 4 10 4 4 4 7 10 4 10 10 4 0 10 10 7 7 10 10 10 4 4 0 0 10 4 0 4 7 7 7 7 7 7 4 4 4 0 0 4 4 0 0 4 4 7 7 7 7 7 10 7 4 0 7 7 7 10 4 7 0 0 4 0 7 0 4 0 0 0 4 4 7 7 4 4 4 0 4 0 10 10 Market Opportunity Share of Cup / Total (drinking) yogurt % Volume of Imports MT Open to Trade Value of Imports US$m Value of Imports USD/Kg Volume of Aus Exports MT Open to Austrade Value of Aus Exports A$m <500MT 501-5,000 5001-10000 90+% 10000+ <$1m $1-10m $11-20m <$1 $1.01-$3 $3.01-$5 $7+ <100 100-500 500-1000 1000+ $2-$5m $5m + <$500K $501K-$2m $20m+ Vietnam 10 101-499 Taiwan 7 51-100 Sub Segment Thailand 4 0-50 Market Value US$m Key Criteria S. Korea Malaysia Philippines 0 Market Volume mKg Scorecard Rating Guidance Singapore India Indonesia Country Market Opportunity Index Hong Kong ■ Market Opportunity: Vol / Val / Consumption per capita / CAGR ■ Open to Trade: Vol / Val / Imports / $/Kg/L ■ Open to Austrade: Vol / Val / A$Kg/L Aus exports to market ■ Sociodemographics: Population / Gross/Disposable Income / Capita / Food expenditure $ ■ Dispersion – Power of Buyers/Suppliers, Top 5 share of mkt ■ Barriers to Entry: Import tariffs, VAT, Product registrations, Labelling, Behind the border trade barriers China ■ 6 9 $/Kg of Aus Exports $4.01-5 $5 + <10 11-50 51-200 200+ Gross Income/capita US$ <$1K $1-5K $6-29K $30K+ Disposable Income/capita US$ <$1K $1-5K $6-20K $20K+ Food expenditure/capita US$ <$500 $501-1K $1-2K $2K+ Power of Buyers (Supermarket Top 5 concentration) Power of Suppliers (Manufacturer Top 5 concentration) >50% 26-50% 10-25% <10% 10 0 4 7 0 4 4 4 10 >95% 81-95% 65-80% <65% Cup Yogurt Brand top 5 % Mkt Share >95% 81-95% 51-80% <50% Import Tariffs >10% 5-10% 1-5% 0% VAT% Competitive Intensity (Concentration of top 5) $3-4 Population (m) Sociodemographic attractiveness <$3 >10% 5-10% 1-5% 0% 10 10 4 0 0 10 0 4 4 7 0 4 10 0 10 10 10 0 4 10 0 0 4 0 4 4 10 4 7 10 0 4 4 7 0 7 4 4 10 4 4 4 0 4 Permit or 3-6 mth >12mth wait & wait time rego Rego <3mths No Rego Normal Export Docs only 7 10 0 0 10 4 10 4 7 4 4 Labelled Labelled pre on arrival Customs in market clearance Minimal importer labelling required Aus labelling ok, no additions required 4 4 7 0 7 7 7 0 0 4 4 Production Registration Barriers to Entry Labelling Mandatories Overall 147 133 96 76 121 78 137 120 92 111 83
  • 7. 3rd C: the Category landscape ■ The category landscape is the consumer’s understanding of the group of products or brands with which ours competes and is crucial because: □ Each category has certain product and pack codes that are expected and challenging these can be disastrous □ The category you target will have a significant impact on the benefits you communicated and the competitive advantage you choose to leverage. □ In most markets data is available around the size and growth trajectories for categories – so making choices around category can help you understand the potential for your product today and in the future □ And finally most categories have clearly defined barriers and drivers. Understanding what these are can provide you with both a clear point of difference and competitive advantage based on either addressing a barrier or amplifying a driver
  • 8. 4th C: to Compete or Collaborate ■ Let’s understand our competition over there more closely…then decide where and when and how to compete or collaborate 1. Understanding your external Threats and Weaknesses and internal Strengths and Weaknesses can help you work out where to compete and where to collaborate. □ □ □ □ Threats? (external) Opportunities? (external) Weaknesses? (your) Strengths? (your) 2. Run the ruler over your competition □ □ □ □ Strengths? (their) Weaknesses? (their) Opportunities? (external) Threats? (external)
  • 9. 5th C: Consumer – the who and the why ■ ■ ■ ■ ■ The first thing we must establish is who do we believe our offer will appeal. Although this may seem obvious it is all too often left at the level of unhelpful generalities such as MGBs (Main Grocery Buyers) We have developed a fingerprinting© tool that aims to help develop an improved understanding of our target It achieves this by focussing on the key questions that help us segment our consumer base – see opposite: Having understood who we want to target the challenge is now to dig below the surface of their behaviours to understand the beliefs and attitudes that are driving them – in others words consumer insight “A profound understanding of consumer beliefs and behaviours that provide inspiring springboards for exciting new brand building opportunities.”
  • 10. 6th C: Customer – who are they? ■ Listen to the Voice of the Customer early on – what do they need or want from us? • Prepare a plan for a constructive conversation with your new potential customers (retailers). • Without an engaged customer (retail partner) supporting your products, you cannot delight consumers • One of the most important outcomes of your “Voice of Customer” excursions will be making the choice on where to focus your effort and where not to go upon market entry.
  • 11. 7th C: Our Competencies, the what and the why ■ ■ ■ identifying what we can excel in from a brand, product and technology / manufacturing perspective – what can we do better than anyone else understanding all our tangible and intangible assets can provide platforms for opportunity and competitive advantage □ what can we own □ what do we own □ what do we own exclusively this allows us to play to our strengths and thereby □ reinforces brand or product credibility □ minimises risk □ provides benefit or to RTB for our consumer □ is what made us famous in the first place
  • 12. 1) Challenge create focus 2) Country 7) Competencies know your strengths 6) Customer create context Opportunity Canvas 3) Category cater to your key partner identify codes 5) Consumer 4) Competition know your target find white space
  • 13. Thank-you. Dermott Dowling Director T: +61 400 040 195 dermott@creatovate.com.au www.creatovate.com.au Patrick Tully Managing Director T: +61 410 867 366 patrick@fusionlearning.com www.fusionlearning.com