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Russian Market Entry Strategy 28 08 (2)


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Russian Market Entry Strategy 28 08 (2)

  1. 1. Драйв созидания « Development of Russian Market Entry Strategy » Service Description Drive of Creation ALT Research & Consulting Company
  2. 2. Why Enter into Russian Market ? Development of Russian market entry strategy Drive of Creation Fast-Growing Large Profitable Hit the ceiling Highly competitive Russian market European market ALT Research & Consulting Company <ul><li>Growth rates of mature European market decline </li></ul><ul><li>Competition on European market grows strong </li></ul><ul><li>Russia has three credit ratings of investment level (Fitch, Moody’s, S&P) and the trend is positive </li></ul><ul><li>Russian non-extractive companies show excellent financial statements and place their shares on the main foreign stock exchanges </li></ul><ul><li>Russia shows growth in the living standard </li></ul><ul><li>Russia is planning to join to the WTO in the nearest future </li></ul>
  3. 3. Examples of The Companies Successfully Entered on Russian Market Development of Russian market entry strategy Drive of Creation Ehrmann yogurts first appeared on the Russian market in 1995. By 1997 the sales in Russia reached 100 million German marks, and the company owners decided to launch production in Russia. The first brick of new plant was laid in the Ramenskoe district in September 1998. In eight years after Russian market entry, Ehrmann’s dairy plant managed to become one of the three leaders on the yogurt market not only in Russia, but also in Ukraine, Belarus, and Kazakhstan, supplying its products to all countries of the former Soviet Union. Kingfisher is the leading home improvement retail group in Europe and Asia. The UK-based DIY group has (already) four stores in Russia, trading under its Castorama brand. The first Castorama store opened in Samara in February 2006. Kingfisher plans to open 50 stores in Russia over the next 10 years, with the aim of becoming market leader in the Russian DIY market. FM Logistic is European logistic operator, successfully (working) on Russia(n) market since 1994. FM Logistic manages 8 warehouses in Moscow and Leningrad regions, Rostov, Yekaterinburg, Irkutsk, Khabarovsk and Vladivostok, and ranks among the largest logistic operators in Russia. TELE2 is European holding providing a broad range of telecom services in fixed and mobile telephony, Internet, high-speed data network services and cable TV. Nowadays the company has 29 million customers in 21 European countries. In Russia TELE2 render GSM mobile services . The first TELE2’s GSM network was launched in Irkutsk in 2003. Today TELE2 is operating 16 regional networks in Russia. Many large multinational companies successfully operate on Russian market for a long time. Recently middle-sized European companies draw their attention to Russian market. There are many examples of European companies, which enter on Russian market successfully. Some of them: ALT Research & Consulting Company
  4. 4. Possible Market Entry Strategies Development of Russian market entry strategy Strategy to choose: key aspects Export Cost leadership Mass market Independent entry Drive of Creation Domestic partner Local production Focus Premium segment or or or or “ Think hard about the appropriate entry strategy - joint venture, representative office, greenfield investment, or acquisition. The complexities of acquiring and building on land might make it more appropriate for retailers or other businesses requiring a lot of real estate, for example, to take over a Russian business.“ FINANCIAL TIMES REPORT “Investing in Russia: rules of engagement for foreign companies”, Oct 11, 2005 ALT Research & Consulting Company
  5. 5. Work Directions Development of Russian market entry strategy Market volume and tendencies I. Industry analysis Customers characteristics, segments and niches Market structure Business-models of market leaders II. Competitive analysis Competitors' products features Benchmarking of main business indicators and business-processes Main features of distribution channels III. Distribution channels analysis Negotiations with potential partners and industry experts Profitability and volume of investments estimate IV. Market entry strategy Market entry options Brand portfolio Positioning and pricing Distribution and promotion Drive of Creation Market threats estimate Competitive risks estimate Sales geography analysis ALT Research & Consulting Company
  6. 6. What Does Client Get as Result of The Project? Market Entry Strategy Contacts with potential partners and clients Russian market understanding & risk reduction Plan of actions to enter to a Russian market Development of Russian market entry strategy Distribution channels Drive of Creation ALT Research & Consulting Company Well-grounded sales forecast
  7. 7. Our Network in Russia Development of Russian market entry strategy Drive of Creation Our partners in Russia Government institutions Entrepreneurial clubs Investment funds Consulting companies Industry associations ALT Research & Consulting Company Research companies Business associations Past and present clients
  8. 8. International partners Development of Russian market entry strategy In order to offer (our) client the best ideas and decisions, we study the world’s best industry practice and invite foreign experts to our projects. Cooperation with the foreign companies and experts allows us to get well-grounded viewpoint on problem we solve, and to use new knowledge and competences of our partners. ALT R&C maintains close relations with a number of the international consulting companies and private experts. MACONET Technology Market Strategies. International consulting company, specialized in research, strategic consulting and market analysis of developing countries (Asia and Eastern Europe). We’ve carry out a great number of co-projects with colleagues from «Technology Market Strategies» for companies such as “SUEK” (“Sibirskaya Ugolnaya Energeticheskaya Kompanija”) , “Silovije mashini”, “Brok-Invest-Service”, Russian Federal Nuclear Center – VNIIEF. Dürr is one of leading world suppliers of systems, services and production for motor industry. In cooperation with experts of company Dürr we’re making a project of development a strategy and technological structure for company “AgroEvroSoyuz”. Management Consulting Network (MACONET). The Eastern European association of consulting companies. ALT R&C (maintains) close mutual relations with members of MACONET, in particular with the largest Eastern European consulting company &quot; AAM Management Information Consultant Ltd. &quot;, specializing on IT and management consulting. The Coverdale International Group. The international training and consulting company. The group includes consulting and training companies in Russia, Austria, the Great Britain, Germany, the USA, Czech Republic and Switzerland. Cooperation (of) ALT R&C and Coverdale actively develops in sphere of trainings and sessions for proprietors and top-managers. FEACO is European Federation of Management Consultancies Association, the umbrella organization for 23 national management consultancies associations. There are no Russian association in this federation, but ALT R&C collaborate with FEACO and head Russian association, which plans to become FEACO member. Drive of Creation ALT Research & Consulting Company
  9. 9. Some of international projects Analysis of Russian market of trucks and of prospects of key segments development on this market for company “ Volvo Truck ” Analysis of Russian market of industrial diesel engines for company “ Volvo Penta AB ” Market research of energy-saving technologies market in Russia for the European Bank for Reconstruction and Development . (in cooperation with English consulting company AEA Technology - leading international advisers in the field of power and ecologies of policy. Examination of market strategy and operational efficiency of Company &quot; Vyso&quot; for the European Bank for Reconstruction and Development . ( in cooperation with Technology Market Strategies) The analysis of tendencies, structure and business-models of European and US logistic companies within the development of strategy for company “Asstra – Associated Traffic AG” Feasibility report of x-ray diagnostic installations manufacture for a company “Ravenstvo&quot; - joint manufacture with Siemens AG The analysis of pricing strategies of the European brick manufacturers within the project for &quot; Pobeda LSR “ The analysis and search of the perspective markets of plywood in the EU countries, the USA and Japan within the project for &quot; United Panel Group&quot; The strategy of an entry to the European market of linen fabrics and bed-clothes for company &quot; Dominion “ The analysis of tendencies, structure and business-models of the European market of lady's clothes for &quot; Melon Fashion Group “ Drive of Creation Development of Russian market entry strategy ALT Research & Consulting Company
  10. 10. Aerospace industry Industry Experience Drive of Creation Development of Russian market entry strategy Food industry Textile and apparel industry Automotive industry Retail Distribution and logistics Machinery Construction and constructional materials Forestry and woodworking industry Extractive and metallurgy industry Engineering Petroleum and chemical industry ALT Research & Consulting Company
  11. 11. Our Russian clients Драйв созидания Development of Russian market entry strategy ALT Research & Consulting Company
  12. 12. Drive of Creation THANK YOU FOR YOUR ATTENTION! Development of Russian market entry strategy ALT Research & Consulting Company 199106, Saint-Petersburg , V . O ., 21 st line , 8. Tel : 7-812-324-87-31 Fax : 7-812-324-88-39 E-mail: 115114, Moscow , Derbenevskaya str., 1/2, bldng . 1 Tel : 7-495-788-59-29 Fax : 7-495-788-59-29 E-mail: alt