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Entry Strategy of SK Networksin China Market 2010.03.12.Fri Team 2 TM: JU Park Team Member: SY Kim IH Joe HP Choi RA : Pay Kim
Agenda
Agenda
*SK Networks2009년 6월 반기보고서 **Annual Report Of China Car Industry, 2009, SERI  Last session overview Because of limits of Biz portfolio of SK Networks in Korea and large opportunity in china market, we decide to enter China refueling market Limits in Korea Market* Opportunity in China Market** + + ,[object Object]
World’s largest car market
M/S of 4 major refueling market player is almost fixed.
It’s really hard to increase M/S of SK Networks.Yearly sales of car in China M/S fluctuation of last 5 years ,[object Object]
On average, 4.6 people per 1,000 will get the car for next three years.
The entire market size of refueling industry is not changed for last 5 years.Market size change of last 5 years A number of car per 1,000 people in China We decide to enter China refueling market
Agenda
KSF of refueling market in china Common KSF of refueling industry and government regulation are the KSF in China market How to find KSF in China Environment Way to find KSF + + General KSFof refueling market Regulationof China government  KSF of refueling market in china Specific factor in China To start gas station business, foreign company should gain the China government’s approval.(quarter regualtion) When foreign companies establish the company in china, shares of foreign companies must be under 49%.
Fitness analysis between KSF and R&C Because R&Cs in China market are not satisfied the KSF of refueling industry, we need to have differentiations compared to other companies KSF and R&C in China market Satisfaction  Index R&C Analysis Required R&C Competitive advantage Exxon Mobile Capacity of establishing channel Shell Standard :  a number of gas station in China Total BP Exxon Mobile Capacity of networking with oil country Shell Standard :  Oil Spot / Location  of oil refinery factory Total BP Exxon Mobile Shell Operating Capacity Total Standard :  Brand awareness. BP Exxon Mobile Standard :  Additional Service that company can provide.. Shell Operating Capacity Total BP Exxon Mobile Standard :  a shares of company comparing to China national enterprise Capacity of make good relationship with China government Shell Total BP Even though SK Networks is not satisfied KSF, so we need to have differentiations to success in the future
Agenda
Methodology of strategy Because of characteristics of refueling industry, we need to achieve KSF first and will find the way to differentiate from competitors 1 2 Short term STG Long term STG 12 Point text: Level 0 Level 1 Level 2 Level 3 12C Mission ,[object Object],Mission ,[object Object],Present concrete methods that can lead to get R&Cs Find R&Cs that is necessary to satisfy KSF Check KSF that SK Networks cannot satisfy Set marketing strategies that make our long term strategy operate well Select biz item that we can develop and operate very well Consider SK Networks’ R&C Set criteria that can make differentiations from competitors 해 해 해 해 해 해 해 Reason ,[object Object]
So, accessibility and price are essential and basic factors to enter refueling marketReason ,[object Object]
SK Networks need to make a differentiations from competitors to beat competitors in china market by using their R&CMethodology Methodology
Short term strategy – Raise R&C to achieve KSF There were many efforts to satisfy the KSF and these efforts supported to improve the R&Cs of SK Networks Efforts that show to improve R&C Expand channels to meet customers ,[object Object]
Speedmate cooperated with SINOPEC that is the biggest refueling company1 2 3 Petrochemical plant Acquisition ,[object Object]
It will take cover the capacity of China marketBrand marketing ,[object Object],SK Networks is improving R&Cs to satisfy KSF in China market
* Annual customer report 2008 in China Market Long term strategy – Make differentiations  We set 3 criteria – Synergy with other biz, Find customers’ hidden need, Not activate in China - to differentiate from competitors for long term STG Criteria to make differentiations from competitors To be able to make synergies with refueling ,[object Object]
Can it share sales channels?
Can it share brand image?
Can it share operating know-how?
Doesn’t it interrupt to support refueling business?1 2 3 To be able to be sufficient hidden needs of customers * ,[object Object]
Hidden needs of car owners in China market- There are not enough repair stores compare with market growthModel that isn’t active in China market ,[object Object]
Biz model that SK Networks can establish and operate wellNot activate yet
Agenda
* Annual customer report 2008 in China Market Item Introduction Combining implications from 3 criteria, we were able to select total car service solution that includes renter car and repair shop Implications from criteria for long term strategy + To be able to make synergies with refueling ,[object Object]
It will be good to deliver same image to targeted customersItem that we selected + 1 2 3 Related with car service One stop service Service model that can’t be searched 해 해 해 Gas station To be able to be sufficient hidden needs of customers * ,[object Object],Car service center Rental car shop Total car service solution!! Model that isn’t active in China market ,[object Object]

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Team2 week2 sk_networks_stg_final

  • 1. Entry Strategy of SK Networksin China Market 2010.03.12.Fri Team 2 TM: JU Park Team Member: SY Kim IH Joe HP Choi RA : Pay Kim
  • 4.
  • 6. M/S of 4 major refueling market player is almost fixed.
  • 7.
  • 8. On average, 4.6 people per 1,000 will get the car for next three years.
  • 9. The entire market size of refueling industry is not changed for last 5 years.Market size change of last 5 years A number of car per 1,000 people in China We decide to enter China refueling market
  • 11. KSF of refueling market in china Common KSF of refueling industry and government regulation are the KSF in China market How to find KSF in China Environment Way to find KSF + + General KSFof refueling market Regulationof China government KSF of refueling market in china Specific factor in China To start gas station business, foreign company should gain the China government’s approval.(quarter regualtion) When foreign companies establish the company in china, shares of foreign companies must be under 49%.
  • 12. Fitness analysis between KSF and R&C Because R&Cs in China market are not satisfied the KSF of refueling industry, we need to have differentiations compared to other companies KSF and R&C in China market Satisfaction Index R&C Analysis Required R&C Competitive advantage Exxon Mobile Capacity of establishing channel Shell Standard : a number of gas station in China Total BP Exxon Mobile Capacity of networking with oil country Shell Standard : Oil Spot / Location of oil refinery factory Total BP Exxon Mobile Shell Operating Capacity Total Standard : Brand awareness. BP Exxon Mobile Standard : Additional Service that company can provide.. Shell Operating Capacity Total BP Exxon Mobile Standard : a shares of company comparing to China national enterprise Capacity of make good relationship with China government Shell Total BP Even though SK Networks is not satisfied KSF, so we need to have differentiations to success in the future
  • 14.
  • 15.
  • 16. SK Networks need to make a differentiations from competitors to beat competitors in china market by using their R&CMethodology Methodology
  • 17.
  • 18.
  • 19.
  • 20.
  • 21. Can it share sales channels?
  • 22. Can it share brand image?
  • 23. Can it share operating know-how?
  • 24.
  • 25.
  • 26. Biz model that SK Networks can establish and operate wellNot activate yet
  • 28.
  • 29.
  • 30. There is no convergence solution of car services
  • 31. We are going to manage gas station and car service center.
  • 32.
  • 34. His name is Ji-Hoon who often use car rental shop because of business trip.
  • 35. He Arrive at Simyang. Ji- hoon come by Speed Mate. And he makes a contract on 4-passenger car during a week. They give him a point card which can use at SK gas station and car service center. for a week. Whenever Ji-hoon refuels for a week , he goes to SK Gas Station because of point card.
  • 36. Example of gas station customer a She is career woman. Every day she go to work by her car. Almost every week she goes to refuel at SK Gas station. There is Speed Mate, car service center, on the side of gas station. And she always saw speed mate every time she stops by gas station. One day, her car broke down . But she has a SK Point card so she doesn’t worry about it. Because she accumulate her point by refueling, she is able to fix her car for free.
  • 38.
  • 39. Discount the price by using customers’ mileage
  • 40. Refueling- Reducing a prime cost- Reducing a distribution cost
  • 41. Renter Car- Reducing a channel establishing cost
  • 42. N/A
  • 43.
  • 44. Make a layout of gas station that considers movement way and arrangement of promotion materials
  • 45.
  • 46. Make a exposing method that can promote related services
  • 48. Make a connection between related services
  • 49. Set point/mileage linkages that can be used through all services
  • 50.
  • 51. Discount the price by using customers’ mileage
  • 52. Refueling- Reducing a prime cost- Reducing a distribution cost
  • 53. Renter Car- Reducing a channel establishing cost
  • 54. N/A
  • 55.
  • 56. Make a layout of gas station that considers movement way and arrangement of promotion materials
  • 57.
  • 58. Make a exposing method that can promote related services
  • 60. Make a connection between related services
  • 61. Set point/mileage linkages that can be used through all services
  • 62. N/A
  • 63. To consider characteristics of people and crowded location of SK Networks’ gas stations, we will start expansion from Simyang
  • 64.
  • 65. Discount the price by using customers’ mileage
  • 66. Refueling- Reducing a prime cost- Reducing a distribution cost
  • 67. Renter Car- Reducing a channel establishing cost
  • 68. N/A
  • 69.
  • 70.
  • 71. Make a layout of gas station that considers movement way and arrangement of promotion materials
  • 72.
  • 73. Make a exposing method that can promote related services
  • 75. Make a connection between related services
  • 76. Set point/mileage linkages that can be used through all services
  • 77.
  • 78.
  • 79. Discount the price by using customers’ mileage
  • 80. Refueling- Reducing a prime cost- Reducing a distribution cost
  • 81. Renter Car- Reducing a channel establishing cost
  • 82. N/A
  • 83.
  • 84. Make a layout of gas station that considers movement way and arrangement of promotion materials
  • 85.
  • 86. All services of SK Networks will share the point or mileage (Customers can use their points or mileages anywhere that are operated by SK Networks)
  • 87. Lock-in our loyal customers through raising transition cost
  • 88.
  • 89. Make a exposing method that can promote related services
  • 91. Make a connection between related services
  • 92. Set point/mileage linkages that can be used through all services
  • 93.
  • 94. Discount the price by using customers’ mileage
  • 95. Refueling- Reducing a prime cost- Reducing a distribution cost
  • 96. Renter Car- Reducing a channel establishing cost
  • 97. N/A
  • 98.
  • 99. Offer full services in every channels(ex. Every gas station can offer to make a contract renter car service)
  • 100. Make a layout of gas station that considers movement way and arrangement of promotion materials
  • 101.
  • 102. Make a exposing method that can promote related services
  • 104. Make a connection between related services
  • 105. Set point/mileage linkages that can be used through all services
  • 106.
  • 107.
  • 108. Synergy with SK Energy- SK Energy’s oil refinery factory which built in China can be a bridgehead to east Asia market
  • 109.
  • 110.
  • 111. Industry Report of China Oil Refueling Industry, 2009, Kotra Appendix KSF and R&C in China market(Accessibility)* To assess the accessibility, as market is not saturated yet, rather a number of gas station than location is more effective index. Interms of accessibility, all the competitors except Total get more accessibility than SKN.
  • 112. Appendix KSF and R&C in China market To assess the competitive advantage of price, we analysis cost structure of each company. Among cost structure, relationship with oil country and a number of refinery factory which located in China is the most important factors. A number of oil spot that each company invests is smallest of all. However, SKN also has one refinery factory in China
  • 113. Appendix KSF and R&C in China market In Promotion, as China’s refueling market is not mature yet, we give the most emphasis to brand awareness. Enterance year of SKN is latest of all.
  • 114. “China’s gas station competition landscape”, www.opinet.com, newspapet script Appendix KSF and R&C in China market Service consists of welcoming sevice, additional gift, and car cleaning service. In fact, there are no quality difference in quality. All the player provide basic service.
  • 115. Appendix KSF and R&C in China market As shares of company affect the strategy that company trying to excute, to get the independence of business, shares of company is really important. First foreign refueling company who get the 100% shares in China