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War Room


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War Room

  1. 1. How to best satisfy your consumers’ needs? Lessons from Australian service exporters
  2. 2. <ul><li>This paper is to be presented </li></ul><ul><li>@ </li></ul><ul><li>The 18th Annual Frontiers in Service Conference </li></ul><ul><li>Co-authors: Professor Pascale Quester, Dr Carolin Plewa </li></ul><ul><li>University of Hawaii at Manoa </li></ul><ul><li>American Marketing Association </li></ul><ul><li>IBM </li></ul><ul><li>University of Maryland </li></ul><ul><li>INFORMS </li></ul>Slide
  3. 3. <ul><li>Service exports </li></ul><ul><li>Research steps </li></ul><ul><li>Key findings </li></ul>Overview Slide
  4. 4. The Service Economy <ul><li>~ 70% of global GDP </li></ul><ul><ul><li>> 70% in developed economies </li></ul></ul><ul><ul><li>50% in developing economies </li></ul></ul><ul><li>70% of employment in OECD </li></ul><ul><li>Global service exports </li></ul><ul><ul><li>US$3.29 trillion in 2007 (18% growth) </li></ul></ul><ul><ul><li>50% of world trade by 2020 </li></ul></ul>Slide
  5. 5. Global Service Exports 1997 – 2007, billions USD Slide Source: WTO (2008)
  6. 6. Leading Service Exporters - 2007 Slide Top 10 Exporters Billions USD % Contribution United States United Kingdom Germany France Spain Japan China Italy India Ireland Australia (24) 456.4 273.0 205.8 136.7 128.3 127.1 121.7 110.5 89.7 89.0 39.7 13.9 8.3 6.6 4.2 3.9 3.9 3.7 3.4 2.7 2.7 1.2 WORLD TOTAL Source: UNCTAD (2008) 3,291.5 100
  7. 7. Australian Service Exports <ul><li>> 2,600 service exporters </li></ul><ul><ul><li>35% exporting between $1-$100 million </li></ul></ul><ul><ul><li>64% exporting less than $1 million </li></ul></ul><ul><li>$48 billion in 2007 </li></ul><ul><li>4.5% of GDP </li></ul><ul><ul><li>2.5% in 1985 </li></ul></ul>Slide
  8. 8. Australian Service Exports, millions AUD Slide Sources: DFAT (2007; 2008)
  9. 9. Composition of Australian Service Exports Slide
  10. 10. BUT… <ul><li>“ Under-serviced” service sector </li></ul><ul><ul><li>Fragmentary , exploratory and lacking a strong theoretical base </li></ul></ul><ul><ul><li>Fail to keep pace with globalisation of services </li></ul></ul><ul><ul><li>Very limited attention to success drivers of service exporters </li></ul></ul><ul><li>Current international business climate </li></ul><ul><ul><li>High competitive intensity </li></ul></ul><ul><ul><li>Volatile market demand </li></ul></ul><ul><li>What internal capabilities help better satisfy international customer needs? </li></ul><ul><ul><li>Service exporter defined. </li></ul></ul>Slide
  11. 11. Research Phase 1: Qualitative <ul><li>10 in-depth interviews </li></ul><ul><li>Service exporters in South Australia </li></ul><ul><ul><li>Computer, communication & information services </li></ul></ul><ul><ul><li>Consulting services </li></ul></ul><ul><ul><li>Financial services </li></ul></ul><ul><ul><li>Transportation services </li></ul></ul><ul><ul><li>Legal services </li></ul></ul><ul><ul><li>Training services </li></ul></ul>Slide
  12. 12. Research Phase 2: Quantitative <ul><li>Self-administered survey </li></ul><ul><ul><li>Online </li></ul></ul><ul><ul><li>Mail </li></ul></ul><ul><li>Sample of 770 service exporters Australia-wide </li></ul><ul><ul><li>254 responses </li></ul></ul><ul><ul><li>33% response rate </li></ul></ul><ul><ul><li>Export-venture focus: 1 services sold in 1 overseas market </li></ul></ul>Slide
  13. 13. Respondent Profile Slide
  14. 14. Sales Profile Slide
  15. 15. Industry Profile Slide
  16. 16. International Business Profile Slide
  17. 17. International Business Profile Slide
  18. 18. Key Findings Slide International Competency Personnel Advantage Brand Advantage Financial Advantage Customer Orientation
  19. 19. Implications for Business Practitioners <ul><li>International Competency </li></ul><ul><ul><li>Identify sources of market information </li></ul></ul><ul><ul><li>Develop a base of information on sales opportunities </li></ul></ul><ul><ul><li>Obtain specific information on the legislation/ regulations relative to your provision of services </li></ul></ul><ul><ul><li>Interpret the quality of market information </li></ul></ul><ul><li>Finance Advantage </li></ul><ul><ul><li>Access to capital </li></ul></ul><ul><ul><li>Speed of acquiring and deploying financial resources </li></ul></ul><ul><ul><li>Size of financial resources devoted to the market </li></ul></ul><ul><ul><li>Ability to find additional resources when required </li></ul></ul>Slide
  20. 20. Implications for Business Practitioners <ul><li>Personnel Advantage </li></ul><ul><ul><li>Knowledge </li></ul></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><li>Experience </li></ul></ul><ul><ul><li>Skills </li></ul></ul><ul><li>Brand Advantage </li></ul><ul><ul><li>Brand name awareness </li></ul></ul><ul><ul><li>Distinctiveness of brand image </li></ul></ul><ul><ul><li>Appeal of brand image </li></ul></ul><ul><ul><li>Strength of brand image </li></ul></ul>Slide
  21. 21. Implications for Business Practitioners <ul><li>Customer Orientation </li></ul><ul><ul><li>Objectives driven by the creation of customer satisfaction </li></ul></ul><ul><ul><li>Regular contact with customer to learn how to serve them better </li></ul></ul><ul><ul><li>Competitive strategies based on understanding customer needs </li></ul></ul><ul><ul><li>Integrated internal functions to serve customers </li></ul></ul><ul><ul><li>Desire to increase value for customers </li></ul></ul><ul><ul><li>Managers understand how employees value customers </li></ul></ul>Slide
  22. 22. Implications for Policy Makers <ul><li>Export assistance/promotion/incentives </li></ul><ul><ul><li>Benefits? </li></ul></ul><ul><li>“ for emerging exporters in service industries, we need to be aware of all relevant government agencies, what grants there are out there, what sort of information can be obtained for free…” ( Executive in South Australia ) </li></ul><ul><li>“ We have and will continue to work with Austrade. We’ve sought assistance from the South Australian government and their representatives in the overseas market. Those agencies have been very helpful to us and they have definitely made a difference.” ( Executive in South Australia ) </li></ul><ul><li>Source: Vinh Lu (2009), Unpublished PhD Dissertation </li></ul>Slide
  23. 23. EMDG: $190 million for 2009-2010 <ul><li>SMEs with annual income < $50 million </li></ul><ul><li>Spent at least $10,000 on eligible export promotion activities </li></ul><ul><li>Get 50% of export promotion expenditure to a maximum of $200,000 </li></ul><ul><ul><li>Overseas representatives/ Marketing consultants </li></ul></ul><ul><ul><li>Marketing visits/ Communications </li></ul></ul><ul><ul><li>Free samples/ Trade fairs, seminars and in-store promotion </li></ul></ul><ul><ul><li>Overseas buyers/ Promotional literature & advertising </li></ul></ul><ul><ul><li>Registration/insurance of IP rights </li></ul></ul>Slide
  24. 24. Follow Up Research <ul><li>Sub-group analyses </li></ul><ul><ul><li>Firm size </li></ul></ul><ul><ul><li>High vs. low international experience </li></ul></ul><ul><li>Other drivers </li></ul><ul><ul><li>Competition </li></ul></ul><ul><ul><li>Home/host government actions </li></ul></ul><ul><ul><li>Market turbulence </li></ul></ul><ul><ul><li>Relationships </li></ul></ul>Slide
  25. 25. Thank you! <ul><li>[email_address] </li></ul>Slide