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vinci play presentation
- 1. A Case forFurther Internationalization
- 2. • Company snapshot • Playground industryoverview • Market Identification • Final Selection • Recommendations PresentationOutline
- 3. CompanySnapshot Legal name Babycam Internationaltrading name Vinciplay Employees 50 Year of founding 2009 Founder Pawel Chodkowski Managing Director Piotr Nadulne Head Offices Warsaw, Poland Production and Warehousing facilities Lowicz, Poland Exports to 15 countries References Skanska, Sheraton, Municipality of Radom, etc.
- 4. Exclusivity agreements preferred by construction companies Strategic and economically interesting partners Contacts,trust and quality are important factors for manufacturers Niche and highly linked to the construction sector Cost-efficient players from countries with low- labor cost are increasingly eating away at incumbent players Long-term relationships Mature Industry PLAYGROUNDINDUSTRYOVERVIEW
- 5. SWOT Analysis Strengths • Low-Cost,high quality production • Flexibility of organization • Flexibility of entry-mode • Can react relatively quickly to market trends • Strong enough financial base to expand with an export-based or OEM model (assumed based on further int’l interest) Weaknesses • Short market & business experience • Low credibility • Young, Polish company with, as of yet, little reputation • Weak financial base relative to some established competitors • SMART playground research still in idea phase Opportunities • Numerous potential markets for expansion • SMART playground technology • Potential for OEM or other deals • High client-reach with international playground conference/expo presence Threats • Implementation of SMART playgrounds in the playground sector, Chinese low-cost, high-quality producers could compete with pirated or original products, Takeover threats by larger players
- 6. ABorn-AgainGlobal According to Bell“well-established firms that have previously focused on their domestic markets, but which suddenly embrace rapid and dedicated internationalization", are known as ‘Born Again Globals’. 5 years in POLAND before market expansion Vinciplay’s foreign markets operations include: Austria, Spain, Denmark, Norway, Sweden, Slovakia, UK, Netherlands, France, Luxembourg, Switzerland, Israel, Italy, Hungary, Russia Export-based entry model, low risk approach
- 7. MarketIdentification Phase 1 • Initialanalysis of 20 potential markets derived through group discussions based on Vinciplay’s past expansion efforts and attitudes and internationalization strategy of expanding into adjacent and nearby European countries Phase 2 • Based on GDP, GDP from construction, inflation, housing index, business confidence and corporate tax rate, as well as geopolitical issues we narrowed down our potential market selection to 5 and compared the above metrics Phase 3 • Further narrowing down our selection, we employed a PESTEL analysis, and were ultimately left with two potential markets for short- to medium-term expansion
- 8. Phase 1 Phase2 Germany Sweden Switzerland China United States Latvia Lithuania Estonia Azerbaijan Russia Mexico Portugal Japan Turkey Kazakhstan Italy South Korea • Germany • Italy • Turkey • United States • Estonia • Lithuania • Latvia
- 9. Italy Politically stabile Eurozonecountry, has survived the economic crisis of 2008-2009 Corruption in Italy is always a potential issue From 2012 we can see good rising tendency in Italy’s GDP Corporate Taxation beneficial 27,5% in Italy versus 31,7% in Poland Very family focused and community is “importante” Environmental rules and regulations most focused on protecting historical ruins/UNESCO sites, which are everywhere in Italian cities. According to the Italian population pyramid for 2015 and 2020, 5-9 year olds are 2,2% of the population. +_
- 10. Turkey The main advantageof Turkey is that their government provide policies on liberalisation. Turkey suffers from widespread corruption and bureaucratic system. According to the projection made by Goldman Sachs till 2050 this country is going to have 9th largest economy in the world +_ Had huge trade gap during last few years, but in 2015 Government manages to decrease it by 39.8 percent compared to year earlier. Turkey has growing proportion of young population and most families have more than 2 children in a family. The proportion of the population below age 15 in Turkey is one of the highest among OECD countries, 25.5 % There are some delays in the Turkish judicial system and in addition some judges who are politically influenced what can easily influence on results of some cases
- 11. Baltics Incorporation law inLatvia, Lithuania and Estonia is constituted to be friendly and simply for entrepreneurs. An European Union members in 2005 +_ On the contrary Estonia has recently noted slowdown in economy. Favourable conditions for setting up business Baltics have flat rate tax systems and they are investors friendly For all three countries domestic demand will be the most important factor for the economy growth. Baltic’s populations are constantly shrinking Leading communications infrastructures provide excellent conditions to foreign entrepreneurs Fertility rate is still between the lowest in European Union
- 12. USA Strong consumer andconstruction sector spending power and habit of constructing new buildings/complexes “Made in America”/”Buying American” important Interactive SMART playgrounds will most likely appear soon in the US and thus provide an opportunity/threat for Vinciplay +_ Upcoming Presidential election will have effect on infrastructure spending Cooperative, friendly Political/Trade Relationship between US-PL Cultural, psychological, geographical distances High investment cost Increasing focus on safety and quality
- 13. Germany +_ Increases in publicinvestment in infrastructureEconomic activity has not been stable Business investments have disappointed The federal government has made EUR 600 million available for further urban development over the period 2014-2015 Since 2002 Germany has an aging population. The population will fall to 65 million people High standard of living and social security Largest population in the EU Germany and Poland having strong trading relations
- 14. FirstwepaidattentiontocountryGDP,asthemostgeneralfeatureofeverycountry.Itgaveusabroadpicture ofhoweconomicallydevelopedtheyare. $17 419,00 $18010,00 $18 423,00 $22 000,00 $25 000,00 $3 853,00 $3 890,00 $3 978,00 $4 594,00 $8 248,00 $800,00 $807,00 $814,00 $942,00 $1 117,00 $2 144,34 $2 207,00 $2 224,00 $2 358,00 $3 396,00 $48,17 $48,31 $49,22 $58,44 $75,56 $31,92 $27,55 $27,16 $37,86 $47,75 $25,90 $24,50 $24,64 $30,93 $39,18 $1,00 $10,00 $100,00 $1 000,00 $10 000,00 $100 000,00 GDP 2014 (bill) Forecast about GDP in 2015 (bill) Forecast about GDP in Q3/2016(bill) Forecast about GDP in 2020(bill) Forecast about GDP in 2030( bill) GDP USA Germany Turkey Italy Lithuania Latvia Estonia
- 15. After general overviewof these countries we decide to go deeper in this analyze. As Vinciplay’s representative told that they mostly work with constricting companies we decided that it will be important to pay attention not only to general GDP but also to GDP from contraction. $686,20 $713,54 $732,00 $763,48 $766,63 $27,22 $36,69 $32,42 $36,70 $40,12 $17,24 $16,91 $16,74 $17,29 $20,10 $0,18 $0,26 $0,27 $0,24 $0,24 $0,66 $0,73 $0,71 $0,78 $1,03 $0,10 $1,00 $10,00 $100,00 $1 000,00 GDP from constraction in Q1/2015 (bill.) Forecast about GDP from constraction in Q4/2015 (bill.) Forecast about GDP from constraction in Q3/2016 (bill.) Forecast about GDP from constraction in 2020 (bill.) Forecast about GDP from constraction in 2030 (bill.) GDP from construction USA Germany Italy Estonia Turkey
- 16. Acomparisonofothereconomicalindicators -2,00% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% Inflation rate 2014 Forecast about Inflation rate Q4/2015 Forecast about Inflation rate Q3/2016 Forecast about Inflation rate 2020 Forecast about Inflation rate2030 Inflation rate USA Germany Turkey Italy Lithuania Latvia Estonia 0 50 100 150 200 250 300 350 400 Housing Index 2014 Forecast about Housing Index Q4/ 2015 Forecast about Housing Index Q3/16 Forecast about Housing Index 2020 Forecast about Housing Index 2030 House index USA Germany Turkey Italy Lithuania Latvia Estonia 0,00% 5,00% 10,00% 15,00% 20,00% 25,00% 30,00% 35,00% 40,00% 45,00% Corporate Tax Rate 2014 Forecast about Corporate Tax Rate Q4/2015 Forecast about Corporate Tax Rate Q3/2016 Forecast about Corporate Tax Rate 2020 Forecast about Corporate Tax Rate 2030 Corporate tax rate USA Germany Turkey Italy Lithuania Latvia Estonia
- 17. GermanyPhase 3 • 5+1Porter’s analysis • Recomendations • Quastions to potential partners • PPP
- 18. • Am lotof big players are active • The new company needs a “German” profile • The relative maturity of the playground market • A niche market, which may hamper transparency and knowledge about operating Threat of New Entrants: Medium Intensity of Rivalry: High • Polish companies are perceived of manufacturing lower quality good by German customers • Significant customer loyalty to local and German manufacturer • price is a very sensitive topic, and especially for organizations with budget restraints Bargaining Power of Buyers: High Threat of Substitutes: Medium • The power of suppliers of standardized goods is low • Some suppliers may be pressed for exclusivity Bargaining Power of Suppliers: Medium Complementary Products: Weak Small local and large global players in this industry SMART playgrounds are being researched by incumbents Offer high quality products as Germans are very quality and reputation conscious In the German playground industry, wood is preferred compared to steel Playground equipment manufacturers are selling equipment worldwide and may transfer and apply learning benefits to the German market Entertainment centres for kids, e.g. parks, water parks, playing indoor or outdoor, malls, arcades New toys and devices No noteworthy complementary factors
- 19. • Partners fromtrade fairs (November 2015 – indefinitely) • Partners from the construction industry (specifically Public-Private Partnerships) (November 2015 – Indefinitely) • Municipalities & government entities (June 2016 - Indefinitely) Contact: Recommendations • CSR • Wooden playgrounds Aditionally: • Email and call • Physical meeting How:
- 20. Questionstopotentialpartners Who do yousupply most within the playground industry (Schools, construction companies etc)? Wer wird im Rahmen der Spielzeugindustrie am ehesten von Ihnen versorgt? (Bsp. Schulen, Bauunternehmen etc.)? Which regions do you supply most? Welche Regionen werden am meisten von Ihnen beliefert? What are your distribution channels? Was umfasst Ihre Vertriebswege? Could you give us an example of a project you are most proud of? Gibt es ein Projekt auf welches ihr Unternehmen besonders stolz ist? How many projects have you conducted in 2014 and 2015? Wie viele Projekte hat Ihr Unternehmen im Jahr 2014 und 2015 durchgeführt? How many installation teams do you have? Über wie viele Installationsteams verfügen Sie? Could you explain what you expect from the partnership with Vinciplay for the future? Was erwarten Sie sich von der Partnerschaft mit Vinciplay und was erhoffen Sie in der Zukunft zu erreichen? What is the value added Vinciplay could bring to our potential cooperation? Welchen Mehrwert würde Vinciplay im Rahmen einer möglichen Kooperation bringen?
- 21. PrivatePublicPartnership Germany schools areseen to be long overdue with their renovations Money is missing for schools to be renovated. Due to ‘Public Private Partnership’ the renovations are made possible. The experiment started in 2007, in Frankfurt, including 4 schools. Hochtief, took the responsibility for the next 20 years, to be in charge of the building, renovating, and investing 250 million euros. In return for this, the city pays the company a 13 million Euros lease payment. Construction company needs to guarantee quality for the next 20 years (Vinciplay even offering 30 years of quality guarantee)
- 22. UnitedStatesPhase 3 • 5+1 Porter’s analysis • recomendations
- 23. • Barriers toentry are relatively low • There is no need of high initial investment nor difficulty in obtaining raw materials or accessing distribution channels Threat of New Entrants: Medium Intensity of Rivalry: High • There is no significant treat that customers can affect the price of the products. • However since the products is quite similar to the ones offered by other companies and it is try to differentiate this kind of products, the price can play some role Bargaining Power of Buyers: High Threat of Substitutes: Medium • There are many suppliers of raw materials for playgrounds equipment • Materials can be also shipped from other countries as some US companies already practise Bargaining Power of Suppliers: Medium Complementary Products: Weak Big and well-established players in the market Strong rivalry is also visible in innovative solutions of those companies, as there are customized products and playgrounds made of recyclable materials Competition is even stronger for companies outside the US, since it seems that the “Made in USA” claim is very welcome. High pressures of safety standards of playgrounds. Parks, water parks, playing indoor or outdoor, malls, arcades Toys and new devices are indirect substitutes and may not cause playgrounds not to be constructed, at least in the medium-term future in our assessment. One can say that complementary factor for playgrounds equipment’s are the number of green space in cities what depends on the decisions of city councils
- 24. • Partners fromtrade fairs • Partners from the construction industry • Municipalities & government entities Contact: Recommendations • CSR • SMART playgrounds • Assembled in U.S.A. Aditionally: • Email and call • Physical meeting • Warehouse (average cost 53, 815$ for 1000m2) How:
- 25.