4. ENTRY STRATEGIES International marketing and management 2010 – SOCRATES PROGRAM.
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Transcript of 4. ENTRY STRATEGIES International marketing and management 2010 – SOCRATES PROGRAM.
4. ENTRY STRATEGIES
International marketing and management
2010 – SOCRATES PROGRAM
2
Major International Marketing DecisionsMajor International Marketing DecisionsMajor International Marketing DecisionsMajor International Marketing Decisions
Marketing aims and objectives?Marketing aims and objectives?Marketing aims and objectives?Marketing aims and objectives?
Strategic decision process:• Country selection• Target product/market• Goals of the target market• The mode of entry• Time of entry• Marketing strategy• Marketing mix plan• Control systems to monitoring the
performance in the entered market
Marketing aims and objectives?Marketing aims and objectives?Marketing aims and objectives?Marketing aims and objectives?
• Build up market position for product• Increase market share• Defense of the market • Introduction of new product• Harvesting from declining• Max. profit from product line• Market entry with product on new market
– but HOW?
• Strategy is:
• a plan - action agenda, an integrated course of action (strategy for restructuring)
• a pattern of apparent behavior that emerges from a series of action (Quality is No. 1 = Ford's strategy)
• a position or match between an organization & a product-market area (product differentiation strategy)
• describes perspective of an organization – concept (company is customer-driven or an innovator)...
• Strategy includes ability to decide WHERE, WHEN and HOW to compete. These decision require knowledge of market trends, competition & competitive advantage of corporation.
MMarketing strategarketing strategyyMMarketing strategarketing strategyy
What is strategy?What is strategy?What is strategy?What is strategy?
• ImaginationImagination about the way how to achieve about the way how to achieve objectives. objectives.
- - who?who? – how markets, how customers (need-– how markets, how customers (need-demand) - demand) - positionposition
- - HOW?HOW? (M. (M. mix – supply, M operations, intensity of mix – supply, M operations, intensity of operations, operations, relation to competitionrelation to competition...)...)
• „„Game plan - designGame plan - design““ – mix of – mix of manoeuvres, which give possibility to firm manoeuvres, which give possibility to firm achieve and keep projected position and achieve and keep projected position and objectivesobjectives. (What to do when will be change?. (What to do when will be change?
Strategic marketing decisionsStrategic marketing decisionsStrategic marketing decisionsStrategic marketing decisions
• Strategic – long time and resourcesStrategic – long time and resources• Sometimes creation of add slogan is strategic Sometimes creation of add slogan is strategic
decisiondecision• Strategic tasks inStrategic tasks in marketing planning: marketing planning:
environmental analysis, identification of environmental analysis, identification of opportunity and threats, objectives formulating, opportunity and threats, objectives formulating, definition of market position, USP, creation of definition of market position, USP, creation of marketing plans, organizing and marketing marketing plans, organizing and marketing management, selection of people, SBU, management, selection of people, SBU, financing, creation of distribution channels, financing, creation of distribution channels, branding... branding... To identify competition advantage To identify competition advantage
Market. strategy & competition advantageMarket. strategy & competition advantageMarket. strategy & competition advantageMarket. strategy & competition advantage
• Competition advantage – why customer will buy Competition advantage – why customer will buy our product, not other.our product, not other.
• Question: Question: How we compete? By what tool? – How we compete? By what tool? – customers needs are without borderscustomers needs are without borders
• We must have unimitated advantage (None We must have unimitated advantage (None competitive advantage is permanent.) competitive advantage is permanent.)
• Competition - me tooCompetition - me too• Sometime is enough lower price – but not for Sometime is enough lower price – but not for
long time and not for all customers.long time and not for all customers.• Better is non price competition (based on Better is non price competition (based on
product – beer alcohol free, on services, product – beer alcohol free, on services, communication, people, innovation...)communication, people, innovation...)
• How & where (market) and when... to How & where (market) and when... to competecompete??
• Company resources and Company resources and market supply for market supply for coconnsumer needssumer needs – possibility for competiting – possibility for competiting – ground for marketing strategy– ground for marketing strategy
• How to?How to?• Exploitation of resources:Exploitation of resources:
– Cost increasing? Decreasing? Cost increasing? Decreasing? – Focus of resources for actual supply? Supply Focus of resources for actual supply? Supply
new product? New market? Now? Later? If yes new product? New market? Now? Later? If yes – how resources?– how resources?
– Pull down actual supply from market? Now? Pull down actual supply from market? Now? When?When?
– How to entry in foreign market???How to entry in foreign market???
Market.strategy & competition advantageMarket.strategy & competition advantageMarket.strategy & competition advantageMarket.strategy & competition advantage
Entry strategiesEntry strategiesEntry strategiesEntry strategies
Home Home productionproduction
Abroad Abroad productionproduction
Consultancy engineering
Direct exporting
Indirect exporting
With investment
Without investment
Indirect exporting
Specialized exporter-agent
Export cooperative
Without investment
With investment
Direct exporting
-agent-for all customers-only privileged customers
-representation office - local branches- daughters:
without stock with stock with services
Home Home productionproduction
-pyggybacking-pyggybacking
Without direct invest.
With direct invest.
Abroad Abroad productionproduction
LicensingKnow-how
Franchising (master franchising)
Profession agreement
Joint ventures - synergy
Agreement about teach in
-minority-majority-parity
Ownerships
-montage-semi product-full production
- buy (aquistion) or- establish
Contract manufacturing
- LCC
Management contract
Strategic aliances-types
Joint Ownership
KFC entered Japan through a joint ownership venture with Japanese conglomerate Mitsubishi.
Market Entry Strategies
• Partner resources availability• Other resources availability• Contacts with local suppliers• Contacts with local customers• Entry to closed markets• Participation on costs• Dividing of risk• Know-how availability• Synergy effect...
WHY joint venture?
R I S KMinimum Maximum
I N S
P E
C T
I O
NM
axim
um
Min
imu
m Export Know-how Franchising Licensing Exclusive representation Joint venture Ownership with own management Ownership with foreign management
EXPORT
at home in abroadManagerial performance
100%
100%
LICENSING
DAUGHTERC
apit
al n
eed
sat
ho
me
i
n a
bro
ad
JOINTVENTURE
ABROAD REPRESENTATION
FRANCHISING
Risk of losing proprietary information
Selecting a foreign market entry modeSelecting a foreign market entry modeSelecting a foreign market entry modeSelecting a foreign market entry mode
Resources Control
High
Medium
Low
Factor
LicensingJoint venture
Exporting (own staff)Exporting
(middlemen)Direct investment
Direct investment
Joint ventureExporting (own staff)
LicensingExporting (middlemen)
Direct investmentExporting (own staff)
Joint ventureLicensing
Exporting (middlemen)
Le
vel
Direct investment
Undifferentiated
Approaches to developing Approaches to developing international marketing strategiesinternational marketing strategies
Approaches to developing Approaches to developing international marketing strategiesinternational marketing strategies
Product
Price
Promotion
Place
Undifferentiated market
Target 1
Target 3
Target 2
Approaches to developing Approaches to developing international marketing strategiesinternational marketing strategies
Approaches to developing Approaches to developing international marketing strategiesinternational marketing strategies
Product1
Price1
Promotion1
Place1
Product2
Price2
Promotion2
Place2
Product3
Price3
Promotion3
Place3
Market segmentation
Approaches to developing Approaches to developing international international marketingmarketing strategies strategies
Approaches to developing Approaches to developing international international marketingmarketing strategies strategies
Product1
Price1
Promotion1
Place1
Product2
Price2
Promotion2
Place2
Product3
Price3
Promotion3
Place3
Market segmentationBased on:Buyer motivationsBuyer preferencesBuyer behaviourBuyer price sensitivities
ReligionLifestyle IncomeAgeetc.
Profiled on:
Marketing strategy and BCGMarketing strategy and BCGMarketing strategy and BCGMarketing strategy and BCG
??
?? ??
??
Selecion of Selecion of segmentssegments
Invest - developmentInvest - development
Keep position-harvestKeep position-harvest
Invest–selectiveInvest–selective
Fall back - deinvestFall back - deinvest
Select invasionSelect invasion(slow skiming)(slow skiming)
Pri
ceP
rice
low
hig
hlo
w
h
igh
PromotionPromotionhigh lowhigh low
Intensive Intensive marketingmarketing
(fast skiming)(fast skiming)
Pasive Pasive marketingmarketing
(slow penetration)(slow penetration)
Wide invasionWide invasion(fast penetration)(fast penetration)
Entry strategies for new productEntry strategies for new productEntry strategies for new productEntry strategies for new product
Market development
s20/c400
PR
OD
UC
TP
RO
DU
CT
new
new
old
old
MarketMarketold newold new
Penetrations50/c100
DIVERSIFICATIONs5/c1400
PRODUCT developmnet
s33/c800
Conso-
lidation
Ansoff´s development strategiesAnsoff´s development strategiesAnsoff´s development strategiesAnsoff´s development strategies
KOMATSU StrategiesKOMATSU StrategiesKOMATSU StrategiesKOMATSU Strategies
QualityQuality
CostsCosts
DifferentiationDifferentiation
DiverzificationDiverzificationFuturistic Futuristic projectproject
„„A“ projectA“ projectTQC, TQMTQC, TQMFor suppliers For suppliers tootoo
ReductionReductionOf components - Of components - rationalisationrationalisation
1000 HP1000 HPRemote controlRemote controlProgram at terreneProgram at terrene
• Product – elimination, diversification, PLC, • Price – status quo, unique price, upper/lower
competition, penetration, skimming...• Distribution – intensive, selective, exclusive,
line price, INCOTERMS, complementary products, two-element...
• Promotion – pull vs. push
M – mix strategiesM – mix strategiesM – mix strategiesM – mix strategies
Competition strategiesCompetition strategiesCompetition strategiesCompetition strategies
- According position – attack/defend- According position – attack/defend
- Cost lCost leadereadership – Deavoo, KIAship – Deavoo, KIA
- Nicher – positionalistNicher – positionalist - Victorinox - Victorinox
- ChallengerChallenger
- Me too – to be the 2nd Me too – to be the 2nd
- Focus – Focus – R&RR&R
- DiDifferentiation - McD...fferentiation - McD...
Evaluation of strategiesEvaluation of strategiesEvaluation of strategiesEvaluation of strategies
Criterions:Criterions:
1. Synergy effect from M-mixu - (1+1=3)1. Synergy effect from M-mixu - (1+1=3)
2. Is clear for customer2. Is clear for customer
3. Is helping to company (profit, turnover...)3. Is helping to company (profit, turnover...)
4. Market share is increasing4. Market share is increasing
5. Possibility to find good market position5. Possibility to find good market position
6. Feasibility in company condition 6. Feasibility in company condition
(resources, skills...)(resources, skills...)
Orientation on foreign market
Orientation on domastic market
Weak competit. position
Strong competit. position
Weak exporter
Competionexportér
Home leaderSeparatist
Level of export orientation & competition position
Entry strategies to foreign market
Investment & delegation Investment & supervision
Delegation without investment Supervision without investment
Minority participation
Joint venture
FDI - majority
Daughter
Direct exporting
Technical support
Managment agreemet
Licensing
Franchising
Privileged representation
Výrobná pobočka
Local branche
Take and care about
I supervise my thingsCare about my money
I care about you
Comparation of JOINT VENTURE & 100 % OWNERSHIP
• Synergy effect• Common financing• Position of home firm• Image of home firm• Better contact with local market• Risk of conflict in firm goals• Agreement is necessary• Availability of inform.& know-
how• Risk of price problems• Better selection of employees• Risk of problems from history -
relation• Common participation on profit• Participation of home partner
• Independent entrepreneurship• Own financing• Position of foreign firm• Image of foreign firm• Worse contact with local
market• Independent decisions• Explicit decision• Full supervision• Own price policy• Problems with local employees• Risk of management leaving
• Own responsibility for profit/loss• In some countries prohibition of
100 % ownership