The document outlines an Export Management System developed for an international business course, detailing steps for analyzing a company's readiness for exportation including industry and company analysis, SWOT assessments, and market selection. It emphasizes strategic frameworks such as Porter's Five Forces and various entry strategies, while providing criteria for selecting target markets and evaluating export opportunities. The process culminates in developing an effective entry strategy and marketing plan based on comprehensive market research and analysis.

1. Export Management System Onlinewww.eimso2.comDeveloped by:Dr. Basil J. JanavarasProfessor of International BusinessMinnesota State University, Mankato, USAfunded by Tunghai International Business for the Practice of International Business Course

2. Suggestions to Start:Preview all four Modules to see the big picturePrint & review our Case Example (Select Bedding)Review Porters 5 Forces Model:eLearning Document (Mindspring)EIMSO link orInternational Business textbookReview SWOT Models:eLearning Document (Mindspring, Southwest Airlines)Management textbooks or online sourcesPrint out & follow complete EIMSO User Guide (help)

3. Company situationModule 1:

4. OverviewChoose Industry & CompanyConduct internal analysisDetermine international experience (if any)Conduct Porters 5 Forces analysis: evaluate the profitability or power dynamics of the specific industry Select a specific product line or service of the chosen company (to export)Analyze companies readiness to exportConduct a SWOT AnalysisEvaluate your company’s competitive positionBriefly state conclusions and recommendations for Module 1Module 1: Company Situation Analysis

5. 1.1 Company Analysis(a) Background(b) Mission(c) Sales/Profits for 3 Years(d) International StrategiesNo. of countries (resources, risk, experience)Sales, Assets, HROperating Subsidiaries(e) Intl. SituationExperienceMotivesCompany SelectionChoose a company that you know about or have an interest inSelect one that has information readily availablePublic traded company or private one that you have a relationship withTry to find a company from Taiwan or Asia

6. Describes a companies movement into foreign markets:Concentration Strategy (low)Diversification Strategy (high)Many markets, quickly, and increasing resources gradually to allExpensive, requires extensive management for successLicensing / franchising entry strategies can reduce resource requirementsone or a few foreign markets until it develops a strong competitive position thereLess resource intensiveLess risk intensive1.1 d Corporate Level International Strategy

7. Prefer PreferFactorBroad(Diversification) Narrow (Concentration)if: if:1. Market growth rate low high2. Market sales stability low high3. Need for product adaptation low high4. Need for promotion low high and distribution adaptation5. Program control requirement low high6. Resource Constraints low highSource: “Marketing Expansion Strategies in International Marketing,” Journal of Marketing, Spring 1979, p.89.Diversification vs. Concentration Strategies: Product and Market Factors

8. 1.1 e Levels / Degree’s of Exporting

9. 1.1 e Export Motives:

10. MethodsIndirect Export (local middleman)

11. Direct

12. Foreign Sales/Marketing Subsidiary

13. License/Franchise

14. Foreign Factory

15. Within current Sales/Marketing

16. Administrative

17. Export Department

18. Logistics Department

19. International Division

20. Global Structure (product, geography, function)1.2 International InvolvementOrganizationKey: Export functions closer to the C.E.O show more resource, attention and commitment to international business

21. International Alternative Options

22. Indirect / DirectINDIRECT: Occurs when the exporting company uses an external organization located within the same country. May use a separate department to correspond, but does no engage in any international sales activitiesDIRECT: Direct sale to importer or buyer in foreign market.Merchants (take ownership) vs. Agents (do not)

24. TodayForeign Sales % of Total SalesForeign Assets % of Total AssetsOverseas Subsidiaries % of total subsidiariesGeographic Dispersion of International operationsExecutive's International ExperienceHow international the company can be?How international the company wants to be?1.2a International Involvement Degrees/Gap AnalysisFuture Desire

25. Export DepartmentOrganizational StructuresInternational Division

27. Porters Five Forces“To Sustain long term profitability you must respond to your competition strategically”. Michael Porter, 1979, The Five Forces of Industry StrategyWe always monitor our rivals (competitors) …but there is more:

28. Smart customers can force down prices (buying groups Wal*Mart)

29. Suppliers can limit your profits if they are powerful enough to dictate prices to you (E.g. Microsoft)

30. New entrants (competitors), often with lower cost structures and hungry for success can require you to increase investments/upgrades to maintain your position (E.g. Ryan Air UK, GolBrasil)

31. Substitute offers can someday lure your customers away (E.g. Magellan GPS vs. the iPhone or Blackberry)1.3 Industry Analysis

32. Threat of New EntrantsBargaining Power of SuppliersBargaining Power of BuyersThreat of SubstitutesRivalry among existing Competitors

33. Supplier & Buyer PowerSupplier Power: how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you or the cost of switching from one to another. The fewer the supplier choices you have, and the more you and the more you need suppliers' help, the more powerful your suppliers are.Buyer Power: how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, they are often able to dictate terms to you.

34. Competitive Rivalry & SubstitutionCompetitive Rivalry: The number and capability of your competitors – if you have many competitors, and they offer equally attractive products and services, then you’ll most likely have little power in the situation. If suppliers and buyers don’t get a good deal from you, they’ll go elsewhere. On the other hand, if no-one else can do what you do, then you can often have tremendous strength.Threat of Substitution: This is affected by the ability of your customers to find a different way of doing what you do – for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power.

35. Threat of New EntryThreat of New Entry: Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.

36. Desire to gain market share puts pressure on prices downwardRaises costs of Capital / BorrowingTherefore, the threat of new entry (competitors) puts a cap on the profit potentialBarriers: Economies of scaleThreat of New Entrants

37. Porters Five ForcesNew EntryCompetitive RivalrySuppliersBuyersSubstitutionsWorksheet

38. One of the least profitable industries because all five forces are strong:Established rivals: compete intensely on price (online reservation systems change continuously, Expedia, Travelocity, Bing)Customers are fickle, always searching for the lowest fare, regardless of carrier (airline independent – non loyal, miles only go so far)Suppliers; Plane (Boeing) and Engine Manufactures (GE, Pratt & Whitney) are few and strong, so are labor unions (highly trained employees)New Competitors enter the market every yearSubstitutes: HSR, Bus, CarPorters Five Forces Example: Commercial Aviation

39. Industry Profitability

40. A theory explaining the relationship between principals, such as a shareholders, and agents, such as a company'sexecutives. In this relationship the principal delegates or hires an agent to perform work. The theory attempts to deal with two specific problems: first, that the goals of the principal and agent are not in conflict (agency problem), and second, that the principal and agent reconcile different tolerances for risk.Agency TheoryWho is your agent?

41. End User Description:Gender, Age, Income, Education, Frequency of PurchasesHousehold Types (large, multi-family, singles)Differences between Domestic and Target MarketsCustomizations required (physical, energy, package, user guide)1.4 Target Market Profile

42. Key advantages and disadvantages

43. For the user

44. Compared to the competition

45. Selling Price (maybe average for a family of products)

46. Product Comparison (H-M-L)

47. Lifecycle Stages:1.5 Product Profile

48. Computer assisted scoring.Team review & analysis.1.6 Export Readiness

49. Strengths = Internal to Company or ProductWeaknesses = Internal to Company or ProductOpportunities =external provided by market)Threats =external attacks from market forcesTrends = What is happening over time (3-5 yrs)Provides us a better insight over time.1.7 SWOT + “T”

50. Conclusion

51. Brief summary of significant results or new insight based on analysis in this Module

52. Ideally one statement for each sub-section

53. E.g. Custom index relevant to your product

54. Final comment: most important revelation for your product/industry

55. Recommendation

56. Decision on what next steps to pursue (go – no go) and how new information may be useful in next step (need to pre-view Module 2)Conclusion and Recommendation

57. Global Market SearchModule 2:

58. Research & Select CountriesSelect Criteria relevant to determine market successDetermine a “weighted value” of importance for each criteriaConclusion and recommendationsReport GenerationModule 2 Agenda

59. Consider Module 1 Analysis:Choose 3-10 countries based onProduct demand indicators or proxiesSimilar target market as domestic marketSimilar cultural and behavioral characteristicsPositive economic and per capita income statisticsShould indicate a high sales potentialThese countries become your “short list”From 230 to as few as three.Country Selection

60. GeneralMarket Size & Growth Rate

61. Exports/Import by Country Past sales figures, 5 yrs

62. by Product Report

63. Per Capita Income/Discretionary Income

64. Middle Class Size and Growth Rate

65. Political Freedom

66. Internet penetration

67. Telephone penetration

68. Mass transportation penetration

69. Proxies

70. DVD for Flat Screen TV’s

71. Home sales for dishwashers

72. Tariff and Quota’s

73. Custom Factors

74. Industry specificCriteria SelectionSpecific (product)

75. Derived Marketing DataEstimate consumption based on GDPUse other countries as a guideIf positive slope, tells us that GDP is important to demandCan be used for planning sales over timeEmerging economies with changing GDP’s

76. Weighted CriteriaEach criteria = X%Enter Year, unit of measure, and the valueShould total 100%Positive criteria to demand don’t check boxNegative impact on demand (e.g. unemployment, corruption), check box= √Transparency International: http://www.transparency.org/Survey: http://www.transparency.org/news_room/in_focus/2008/cpi2008/cpi_2008_tableCountry Evaluation

77. US Commercial Servicewww.export.govDoing business in>www.doingbusinessin.orgSee EIMSO website resourcesCIA FactbookYahoo.finance.comSources

78. Conclusion

79. Brief summary of significant results or new insight based on analysis in this Module

80. Ideally one statement for each sub-section

81. E.g. Custom index relevant to your product

82. Final comment: most important learning for your product/industry

83. Recommendation

84. Decision on what next steps to pursue (go – no go) and how new information may be useful in next step (need to pre-view Module 3)Conclusion and Recommendation

85. Questions???

86. IN-Depth Market ANALYSISModule 3:

87. Select top 2 countriesDevelop business contacts that may assist with exportingAgents/Distributors

88. Government agencies, etc.Determine market sales potential Develop a profile of the top two competitorsModule 3 Agenda (part I)

89. Consider all sources of information:Government Trade offices (www.export.gov)Associations, Journals, Reports, NewspapersProvide leads or contact names.Trade Fair Schedules (by country)Names and coordinators of industry leads/contactsDistributors from online databasesAlibaba, ebay, Make a list and prioritize from strong to weak.3.1 Contacts

90. China ExamplesChina Consumer Market

91. China Automobile Industry

92. China Beverage Market

93. China Consumer Demographics

94. Global Beverage Market

95. World Coffee Market