csda

1. Session 3
Export Planning

2. Planning Insights ….
“As a CEO nothing focuses your mind better that the sight
of a constant competitor who wants to wipe you off the map”
Jack Welch

3. Planning – Why Do It ?
….. so that you’re not one of the 43% of firms that fail after 3
years! (OECD Data)

4. Planning Concepts
- Planning is about identifying options
- Planning is about “creative destruction”
(Joseph Schumpeter)
- Planning is about thinking “outside in” NOT “inside
out”
- Planning is “if you always do what you’ve always
done, you’ll always get what you’ve always got”
- It’s 1% inspiration and 99% perspiration

5. Planning – Concepts
So planning is :-
- what you want to be and where you want to go
- identifying a (profitable) market need
- winning customers
- anticipating changes to customer’s needs
- anticipating changes to competitor’s actions
- anticipating changes to the market environment
- then build strategies and implement them that will achieve the
firms goals of long term profitable growth

6. The Concept of ‘Market Difference’
1. Each marketplace (macro, micro issues) is unique ...
( Bangladesh, Finland, Myanmar, Germany …)
2. So product / service options may be different ...
(Avon USA / China, Apple China / India…)
3. So there may be different competitive positions ...
(Kellogg’s - USA / Japan)
4. So strategies to achieve market needs (and the firms
objectives) may therefore be different
( Wal-Mart Japan / USA)

7. The Export Planning Model
External Possible Customers Marketing Process
Environment Target Customers Who to sell to ?
Political With what ?
Legal Who to Buy From ? Where ?
Economic When ?
Social How ?
Technical
Cultural The Market Place
Outcomes
Profitable Growth
Their Offers V’s Yours ? Quality Customers
Repeat Business
Competitors You

8. Export Market Planning
We use many analytic tools in a
‘situation analysis’ …

9. The 5 Very Important Export Planning ‘Tools’
1. Which Country – ‘GE / McKinsey’ Matrix
2. Market Segmentation and Target Market(s) Evaluation
3. Competitive Advantage Evaluation
4. Product / Service Needs
5. Risk Management Evaluation

10. 1. Which Market(s) ?

11. - market size
- growth rate
- competitive intensity
- rate of change
- barriers to entry
- economies of scale
- required capitalisation
- legal regulations
- market share
- product quality
- price competitiveness
- marketing capabilities
- production strength
- distribution capabilities
- sales effectiveness
- capacity utilisation
- experience curve effect
Market Attractiveness Business Strength
Country / Market Analysis
(GE Matrix / McKinsey Matrix)

12. Using the G.E./McKinsey Matrix
1. Finalise the categories in both ‘business strengths’
and ‘industry attractiveness’
2. ‘Weight’ each criteria (give each a mathematical degree of
importance – usually /100 or 1.00)
3. ‘Score’ business strengths for each market /100 or 1.00
(they may be the same for different markets)
4. ‘Score’ industry attractiveness for each market /100 or 1.00
5. Multiply each score by its weight for each category …
6. Add totals for “Business Strength” and “Industry Attractiveness”
for each market
7. Plot each market on ‘X’ and ‘Y’ axis …… (over)

13. G.E./ McKinsey Matrix
Competitive Strengths
Italy
Invest
Libya
Invest
China
?
Poland
Invest
Jordan
?
Tunisia
Divest
Ghana
?
Iran
Divest
Egypt
Divest
Market
Attractiveness

14. If you are a new exporter
 Compare markets using different data/tools available
 Check market access – laws and regulation, duties/tariffs,
non tariff barriers, export documentation
 Primary research- your consumers/ industry consultants,
visit them if possible.
 Competitive analysis
 Know your target audience and their needs
 Find selected markets

15. 2. Market Segmentation and
Target Market(s) Evaluation

16. What is Market Segmentation?
It’s a concept that suggests that not everyone wants / needs the
same things. ALMOST EVERYTHING in your life IS SEGMENTED!
- food
- music
- colours
- clothes
- cars
- houses
- holidays
- entertainment
- etc.

17. Market Segmentation
To create these ‘pictures’ of customer’s wants/ needs we use
4 basic ‘tools’ :-
1. Geographics (where they are)
- say region, country, state, city, area of city or even street
2. Demographics (who they are)
- age, sex, income, address, education, type of job, religion…
3. Psychographics (their lifestyles)
- personality, lifestyle, values
4. Behaviouristics (how important it is to them)
- attitude to and usage of product/ benefits the audience seek from
the brand

18. Creating Market Segments
So, using geographics, demographics, psychographics and behaviouristics,
you can create as detailed a ‘picture’ of potential customers as you need for
market planning purposes.
And REMEMBER! – the more detailed the ‘picture’ is that you have, the more
accurate the product / service offer will be … and so the higher the chance of
success that you will have

19. How Costco focused on a different
segment in Japan

20. Market Segmentation Analysis Grid
All Market Segments 1 2 3 4 5
1. Approx’ Size
(no’ of potential customers)
4,500 12,000 7,000 9,000 1,500
2.Key Trends
(say - last 3yrs)
3.Forecasts
(say - next 3yrs)
4.Key Buyer Criteria Price Quality Brand Stock Help
Line
24/7
5.Key Competitors
(and how they compete)
A & D
Price
B
Quality
C & F
Brand
Price
A
Price
Stock
B
Tech’
Support
6. Profitability
(High, Medium, Low)
L H H L M
7. Target?
(Your decision – yes / no?)
NO YES! NO NO NO

21. 3. Competitive Advantage Evaluation

22. Competitive Advantage Formulation
Key Issues?
1. How are you going to compete ?
- beware of just exporting ‘domestic’ CA !
2. Key local competitors and how they compete ?
- may be Government affiliates – e.g. China ‘SoE’s
3. How are you going to build it ? - McDonald’s
4. Can you make it sustainable ?
- ‘Nike’s repeated reformulation of their business
model

23. How Do You Evaluate and then
Build Competitive Advantage ?
1. Use market research to identify the key customer
‘buyer criteria’ (the factors that they consider in making a
‘buy’ decision)
this is what we call the “buyer criteria”
2. Also, get the customers to ‘weight’ their buyer
criteria
(degree of importance of each factor)
this is what we call the “buyer hierarchy”

24. Evaluating Competitive Advantage
First, research ‘buyer criteria and hierarchy’
(Example of buyer criteria and hierarchy for the ‘family’ car …)
Criteria Hierarchy
1. Size - 40%
2. Safety - 30%
3. Economy - 15%
4. Warranty - 10%
5. Price - 5%

25. Evaluating Competitive Advantage
3. Then get them to tell you the names of the other suppliers they
would consider buying the car from … say they mention firms A,
B and C
4. Ask them to rate / evaluate their ‘buyer criteria’ against each of
the competitor offers, out of 10 (1 being low, 10 being high)
5. Construct a ‘differential / importance matrix’ to show this
information

26. Evaluating Competitive Advantage
(for the ‘family’ car …)
(Rate Competitors /10)
Who are your competitors ?
How do they compete ?
So Construct a
‘Differential Importance Matrix’
Buyer Criteria
A B C
Size 5 7 9
Safety 3 8 1
Economy 10 2 5
Warranty 7 1 8
Price 4 9 3

27. Evaluating Competitive Advantage
6. Now consider the most effective offer that you can
make to potential customers …
7. Validate it against the competitive offers …
8. Build it / Test it / Launch it ….

28. Evaluating Competitive Advantage
(for the ‘family’ car …)
(Rate Competitors /10)
A. Who are your competitors ?
B. How do they compete ?
C. Your most effective
Competitive offer …
(You may have to
compromise on some of
these ‘values’)
D. So ‘build’ this
Buyer Criteria
A B C
Size 5 7 9
Safety 3 8 1
Economy 10 2 5
Warranty 7 1 8
Price 4 9 3

29. 4. Product / Service Needs
(for ‘Target’ Segments)

30. 30
Evaluate the Product / Service
Required in the O’seas Market
Remember that IN ALMOST EVERY CASE your product will need to
adapted in some way for the overseas market:-
Here are some examples ….
- Cars (left / right drive, emission control)
- Clothes (sizes, labelling, styles)
- Books (language / format)
- Medical / Legal (local ‘certification’)
- Engineering (specifications and safety standards)
- Labels (ingredients – regulations vary in each country)
- Electrical (different voltage, ‘pin’ configurations)
- Food (tastes)
So for your target market segment(s) – WHAT SPECIFIC FEATURES
and BENEFITS do you need to offer? To be detailed later in another
module.

31. 5. Risk Management

32. Risk Management – Supply Chain Map
(identify what can go wrong, where, when and causes)

33. The Risk Management Process
1. Identify all potential risks.
2. Rank each risk according to the likelihood of occurring and potential severity. These risks
can include macroeconomic risks, such as the risk of inflation; political risks, such as civil
unrest or economic sanctions in a given country or region; and business-specific risks,
such as the potential for decreased market demand and changes to customers’
creditworthiness.
3. Evaluate strategies to manage these different types of export risks, including developing
customized payment terms, targeting business partners only in specific locations or
industries, and insuring against specific and significant risks where possible.
4. Monitor risks over time as circumstances and conditions change and adjust risk
management and mitigation approaches according to new information.

34. What kind of risk are there
 Political Risks
 Legal Risk
 Credit & Financial Risk
 Quality Risk
 Transportation and Logistics Risk
 Language and Cultural Risk