REFLECTIONS ON ENTREPRENEURSHIP, STRATEGIES, NETWORKING AND DOING BUSINESS IN THE ASIAN REGION.

Dr Jane Menziesjane.menzies@deakin.edu.au Department of Management, Deakin Business SchoolDeakin University, Australiahttp://www.linkedin.com/profile/viewid=9062770&trk=nav_responsive_tab_profile

INNOVATION

Baregheh, Rowley and Sambrook (2009):

Innovation is the multi-stage process whereby organizations transform ideas into new/improved products, services or processes, in order to advance, compete and differentiate themselves successfully in their marketplace (p. 1334).

INNOVATION

•Win in international markets with innovation!–Product–Process–Market–Management tools & efficiency–E-innovations

•Henderson & Clark (1994)–Radical vs Continuous Improvement–Architectural vs component innovations

INNOVATION

•How to improve innovation in your firm?

•Greater spend on Research & Development (R&D)•Employment of highly educated staff (masters, PhD level)•Motivation and rewards•Culture of innovation, creativity and freedom to explore new ideas!

ENTREPRENEURSHIP

• Creative solutions to problems!• Problems as opportunities!• Inventors – create something new• Engineers – someone who uses maths, science and creativity to build something new!• Entrepreneurs are people who can bring different parts of a business together:

–Investors, R&D, marketing, sales, production.

–Have a vision.

ENTREPRENEURSHIP

•Self employment with an uncertain return (McMullan & Long, 1990).• Innovation, growth, uniqueness, risk taking, proactive.•Outcomes of entrepreneurship – creation of value.•A person who carries out new combinations – new products, processes, markets, organisational forms or sources of supply (Schumpter, 1934).

ENTREPRENEURSHIP

•Are you going to create a new organisation or build on your current one.

• Is “the process whereby the firms engage in diversification through internal development…new resource combinations to extend firms activities in unrelated areas,” (Burgelman, 1983).

ENTREPRENEURSHIP

•Birth of a new business, and transformation of existing businesses through a renewal of their key ideas. •Rapid departure from pre-existing organisation.• “Liability of newness” (Stinchcomber, 1965).•Selling the innovation•Getting the funding/investment

HOW TO DO BUSINESS IN THE ASIAN REGION

•Conduct a country analysis•Think about what you actually want to provide to your country in Asia•Pick the country (or countries) that will offer your business the greatest advantage

WHAT DO WE LOOK FOR IN COUNTRY ANALYSIS

•Benefits (Customers, market share, brand awareness)•Risks (Legal, political, economic, cultural)•Costs of doing business (Legal, cultural, time, actual cost)

• Politically stable • Economically stable •Country that protects legal/property rights• Free market systems• Low inflation rates• Low private sector debt

DEVELOP STRATEGY•Develop mission statement•Do SWOT analysis• Industry analysis•Competitor analysis• Set the strategic goals• Set the international strategy• Set corporate strategy• Set business level strategy

INTERNATIONAL STRATEGY• Pressures for cost reductions• Pressures for local customisation

• International Home replication strategy• Global standardised strategy• Localisation (multidomestic strategy)• Transnational strategy

SELECT AN ENTRY MODE• Several factors affect the choice of entry mode

including:

–transport costs

–trade barriers

–political risks

–economic risks

–costs

–firm strategy

• The optimal mode varies by situation—what makes sense for one firm might not make sense for another.

SELECT AN ENTRY MODE

When to enter?First mover advantages – enter a new market

earlyFirst mover disadvantages – pioneering costsLate market entry

Scale of market entryLarge scale entry – indicates more commitment

to the market Small scale entry – gives an opportunity to learn

about the market.

SELECT AN ENTRY MODEExporting

Manufacturing Contracts

Management Contracts

Licensing

Franchising

Wholly owned foreign entity

Greenfield site

Acquisition

Joint venture

Strategic alliance

IMPORTANCE OF NETWORKINGInternationalisation often occurs due to

networking:

My client asks me to provide a service in a foreign

country

Provide the service, and I meet other firms

Other firms ask me to provide the service, and so on.

Next thing I develop a reputation, more business.

I set up an office, and then win more business.

Therefore, Liability of Outsidership!

Important to get into networks!

CONSIDER SUPPORT IN HOST COUNTRY–International Trade Offices •Austrade for Australia•Matrade for Malaysia

–What do they offer?•Information, contacts, networks•Seminars, on the ground support•Market development grants•Training programs•Export financing•Export Insurance

CONSIDER SUPPORT IN HOST COUNTRY–Chambers of Commerce or Business•Australia Malaysia Business Council •Malaysia Australia Business Council

–What do they offer?•Introductions, contacts and networks •Introduction into the community/support•Events and seminars•Information

DESIGN THE HUMAN RESOURCES STRATEGY

–Depends on the entry mode used?

–How will you staff your international activity?

–Will it just be you as a one man/woman show or more?

–Expatriates?

–Will you use host country nationals and what are some of the implications of managing them?

–Joint venture or strategic alliance partner staff?

–Training/development

–Performance Appraisal

–Compensation and rewards

DESIGN MARKETING STRATEGY–Degree to which you customise or standardise the elements of the 4Ps

–What is your customer target? Consumer or B2B?

–Product (Does it need adaptations of the market place?)

–Price (Price point, can my customer afford my price?)

–Promotion (What media is available – how to reach the customer?)

–Place (Concentrated versus Fragmented distribution)

CONCLUSIONS– Innovation and entrepreneurship are important to

businesses

– Important to conduct appropriate country analysis before

entering markets

–Based on selecting the right country/countries need to

appropriately develop strategies.

–A business strategy can be established to tackle the

international market.

–Now we are going to:

•Develop strategies for the Asian region for either new or old products or services.