INTERNATIONAL BUSINESS DEVELOPMENT STRATEGIES

Lylya Djenane – Sixtine Boulard- Névine Chatila – Axel Barat

Agenda

Context Project Presentation Parameters of influencing costs Quality Operation and ranking Risk analysis Corruption Analyze results Matrices Conclusion

CONTEXT

E Tree is a social company which aims to promote environmental awareness and sustainability, to create a link between the community environment.

Powered by solar panels directly from the sunIndependent unit that produces green energyProvide a wide variety of services

Docking station to charges smartphones, tabletsNight illuminationFree Wi-FiA water trough the animals

PROJECT PRESENTATION

TURKEY

ISRAELTUNISI

A

TUNISIA

Area: 163 610 M²Population: 10 982 754GPD: 47 Bn (2014)GDP Growth: 2,6%% Unemployment:

15%

TURKEY

Area: 783 762 M² Population: 747 242

691GPD: 799,5 Bn (2014)GDP Growth: 3,0%% Unemployment:

9,3%

ISRAEL

Area: 20 770 M²Population: 8 334 000GPD: 304,2 Bn (2014)GDP Growth: 2,8%% Unemployment:

5,3%

ISRAEL

P Does not have peaceful relation with PalestineRepresentative democracy

E Natural resources: 77Bm (2012)Israel export reached 64,74Bm (2012)

S 75,5% of the population are Jewish – 20,6% Arabic 92% of Israelis live in urban areas

T Leader in water technology90% of Israelis homes use solar energy

E Does not have peaceful relation with PalestineR&D represent 4,7 of its GDP

L Unemployment represent 5,3% Tensions and conflicts with the others country

ISRAEL

STRENGTHS

Israel’s workforce is highly educatedMajor industries include high-skill manufacturingIsrael’s start-up scene has been described as “The world’s other Silicon Valley”

WEAKNESSES

Israel lacks a global banking presenceIsrael processes little in the way of natural resourcesThe domestic market is small, so companies must focus internationally

Technology

Health care

Security

OPPORTUNITIES

Almost 40% of Israelis report considering emigrationHostile relationships with neighbouring countriesOn-going unrest and the constant possibility of war

THREATS

TURKEY

P Policies on liberalisation Turkey has known violent terrorist attack

E High flow of foreign investments7th economy of Europe

S Important growth of young population High level of unemployment Religion: Islam and Christianism

T Significant development for Information Communication and Technology Low expenditure cost on Research and Development

E Affluent natural resource Ranked as the 9th on biodiversity throughout Europe High pollution level – Use of chemical and detergents products

L Unemployment represent 9,3%Comprehensive legal structure Robust framework for the business entities

TURKEY

STRENGTHSRapid credit growth in the economy Entrepreneurial business expansion.Steady regulatory improvements make it easier to set up and run a business in the countryGovernment helps and supports start-up businesses

WEAKNESSESInnovation is weakened by the lack of intellectual property rights protection

The desire of investing is still weak compared to other big markets

Located between key markets (Europe, the Middle East, Russia, Central Asia)High evolution of the Turkish Economy these last 10 years Potential of growth in many industries.Turkey bet on technology researches Possibility of expansion

OPPORTUNITIES

Dangerous borders (especially with Syria now)Very competitive environment for entrepreneurs because of a strict slowdown of the economic growth recently.Lack of the skills given by the education system Harder to innovate

THREATS

TUNISIA

P Constitutional Republic, with guarantees rights for women Included in the European Union’s European Neighbourhood Policy (ENP)

E EU’s 30th largest trading partnerOne of the most competitive economy of Africa and the 40th in the world; quite high unemployment rate (15,2%)

S A mixed culture98% of Arab populationHigh education level (6% of the GNP)

T Electricity used is produced locallyFew investment in research and development

E Between tropical and temperate climate ; Humidity and dryness alternateThe water is unequally shared out, rare resource

L Consumer protection law, environmental etc. very strict

TUNISIASTRENGTHS

Strong relations with the European UnionThe government help and supports outsourcing and offshore activitiesHigh education Level

WEAKNESSES

Very few investment in Research & Development

Weak economy of scale

It is a growing economyStrong development of democratic principlesNew recent regulations to facilitate trade by reducing trade barriersEconomy of scale

OPPORTUNITIES

Strong competition between local and international companies To build a start-up becomes very difficult.Progress on trade facilitationGrowing bargaining powers of customers

THREATS

PARAMETERS OF INFLUENCING COSTS

Tunisia Turkey Israel

5.30%

7.14%

-0.40%

Inflation 2015Inflation 2015

Tunisia Turkey Israel

38 34

109

Getting Electricity Rank 2014Getting Electricity 2014

Tunisia Turkey Israel

25%20%

27%

Taxe Rate %Taxe Rate %

PARAMETERS OF INFLUENCING COSTS

Tunisia Turkey Israel

15.418.1

23.2

Profit tax (% of commercial profits) 2014

Profit tax (% of commercial profits) 2014

PARAMETERS OF INFLUENCING COSTS

Tunisia Turkey Israel

145.44

425.17

1063.56

Minimum Wages Eur/Month 2015Minimum Wages Eur/Month 2015

PARAMETERS OF INFLUENCING COSTS

Israel Turkey Tunisia

0.89 €

0.11 € 0.06 €

Price (Eur) of electricity / KWhPrice (Eur) of electricity / KWh

Tunisia Turkey Israel

805990

620

Costs of Export (US dollar per container) price 2014

Costs of Export (US dollar per container) price 2014

Tunisia Turkey Israel

9101235

565

Costs of Import (US dollar per container) price 2014

Costs of Import (US dollar per container) price 2014

PARAMETERS OF INFLUENCING COSTS

ISRAEL TURKEY TUNISIAInflation rate

Profit TaxGetting

Electricity Price of

ElectricityLabour and

Social Database

ISRAEL TURKEY TUNISIAMinimum Wages-

EUR/Months

Economic Policy and

Debt Database

CONCLUSION KEY SUCCESS FACTOR #1

ISRAEL TURKEY TUNISIACosts to exportCosts to import

Private sector

QUALITY

Tunisia Turkey Israel

79.6594.92 97.76

Literacy rate, adult total (% of people ages 15 and above)Literacy rate, adult total (% of people ages 15 and

above)

Tunisia Turey Israel

47.6 49.463.4

Labor force participation rate (% of female population ages

15+)Labor force participation rate (% of population ages ...

QUALITY

Tunisia Turkey Israel0

5

10

15

20

25

30

Long-term Unemployment (%)

Long-term Unemployment (%)

NC

QUALITYInternational Human Development Indicators

QUALITY

ISRAELYES! * For Israel sees energy revolution as an opportunity to seize, creating wealth and employment

TUNISIA

YES! * Environment? A priority area of work with Tunisian civil society* Companies and associations participate independently in the dynamics of the sector know-how and investments.

TURKEY

YES!* Istanbul 2020 reinforces its commitment to ecology by announcing a tree will be planted for each person participating in the 10th United Nations Forum on Forests in Istanbul; (already more than one million trees in Istanbul since 2011)

Sensitive to Sustainable Development / Green Tech

CONCLUSION KEY SUCCESS FACTOR #2

TUNISIA TURKEY ISRAEL

HDI

Literacy

Labor force participation rate

Labor Force Female

Long Term Unemployment

OPERATIONS AND RANKING

Tunisia Turkey Israel

20

1410

Time to import (days) 2014Time to import (days) 2014

Tunisia Turkey Israel

1613

10

Time to Export (days) 2014Time to Export (days) 2014

OPERATIONS AND RANKING

Tunisia Turkey Israel

47.7

40.5

Average usual weekly hours worked 2014Average usual weekly hours worked 2014

NC

Countries Risk Analysis

Sovereign Risk

Currency Risk

Banking Sector Risk

Political Risk

Economic structure

Risk

Country Risk

France A B BBB AA A A

TunisiaCCC B CCC CCC B CCC

TurkeyB B BB B BB BB

IsraelBB1 A+ NC NC NC A3

RISK ANALYSIS

Perception Index 2014

Tunisia Turkey Israel

40 4560

Corruption Perception (score 2014)

Corruption Perception (score 2014)Ranking (out of 174 countries) 37 e – Israel 64 e – Turkey 79 e – Tunisia

CORRUPTION

TUNISIA TURKEY ISRAEL

Time to Import

Time to Export

Global Country Risk

Av. Hours worked NC

Corruption

CONCLUSION KEY SUCCESS FACTOR #3

ANALYSE RESULTS

MATRICES - ISRAELMC KINSEY 1/5

We’ll assign weighted coefficients 1 to 3 shades representing low, medium, high.

Parameters Coefficient Notes

Growth potential in this market 3

The company is structured for large series. The growth potential in the green tech market is very important.

Margin potential 1It's not really the focus of the company because it is in a growth period.

Risk in this market 2

Risk inherent in all types of market, however it has to be limited because the goal is the sustainability of the business.

Geographical location 3

It is the company's differentiator.

MATRICES

Parameters Growth Potential

Margin Potential

Risk Location ∑ X

Coefficient 3 1 2 3 9 2.25

Tree Trunk Creation

1 (Introduction / Launching product)

1 (Launch, reduced profit)

1 (weak) 3 (very important)

6 1.5

Assembling photovoltaic

panels

3 (growth in the green tech market is important)

1 (reduced profit)

1 (weak) 3 (responsiveness, cost optimization)

8 2

Accessibility to electricity

1 (basic service)

1 (no marge) 1 (no-existent)

3 (Cost optimization)

6 1.5

Assembly Terminal Wifi

2 (medium) 1 (no marge) 1 (no-existent)

3 (Cost optimization)

7 1.75

Production of fresh water

2 (medium) 1 (no marge) 2 (no-existent)

3 (Cost optimization)

8 2

MC KINSEY 2/5

1 to 3 : low, medium, high (= good)

MATRICESStrengths of the business sub-segments: (KFS)

- Costs : ability to master the costs and offer competitive prices- Deadlines : ability to master supply chain and master delays

-Quality : ability to deliver the expected quality- Location : Closeness- Reactivity : responsiveness to changes and schedules

Parameters Costs Deadlines Quality Location Reactivity X

Coefficient 3 3 3 3 3 15/5 =3

Tree Trunk Creation

1 (non competitive company)

2 (medium) 3 (would be good)

3 (important because many imports from France)

3 (would be good)

(1+2+3*6) = 12/5 =2.4

Assembling photovoltaic

panels

1 (non competitive company)

2 (medium) 3 (Good) 3 (Strong point : at the heart of market)

3 (would be good) 2.4

Accessibility to electricity

3 (important) 3 (important) 3 (would be recognized by customers)

3 (important) 3 (would be good) 3

Assembly Terminal Wifi

3 (important) 3 (important) 3 (would be recognized by customers)

3 (important) 3 (would be good) 3

Production of fresh water

3 (important) 3 (important) 3 (would be recognized by customers)

3 (important) 3 (would be good) 3

MC KINSEY 3/5

MATRICESMC KINSEY 4/5

Strength of E-Tree

Competitive position / Market attractions Strong Medium Weak

StrongMaintain its position Invest to increase Invest selectively

MediumInvest selectively Selective profitability Limited expansions

WeakProtect and stay

focusSelective profitability Abandon

MATRICESMC KINSEY 5/5

MATRICESANSOFF 1/1

The matrix Ansoff is one of the most used in the decision on growth strategies.

Product / Market Existent New

Existent Market Penetration Product Development

New Market Development Diversification

E-tree Project?New market + new product = new product diversification

-Involves the development of new activities.

-The new strategic business area (SBA) comes from the creation of the company.

- Our start-up has a 'diversification' strategy as we are affected by costs of new product development as well as trying to break into the marketplace.

I

S

R

A

E

L

WHICH COUNTRY DO WE CHOOSE?

According to our various analyzes, it was found that Israel wins!

The Israeli economy is an atypical case in the Middle East:

Economically isolated from the others The only truly developed to join the OECD Economic & Technological performances Vital Resources (water, electricity, weather)

https://www.youtube.com/watch?t=38&v=gCAdxeH0ITg

S O U R C E S

http://www.imf.org/external/country/TUN/index.htm http://www.tradingeconomics.com/morocco/gdp-growth (indicators) http://data.worldbank.org/country/turkey?display=default (data, countries, indicators) http://www.tradingeconomics.com/country-list/inflation-rate http://www.doingbusiness.org/Rankings (Data, rankings, methodology) http://www.unicef.org/ http://epi.yale.edu/epi/country-rankings http://ec.europa.eu/eurostat/statistics-explained/index.php/Labour_cost_structural_statistics_-_levels (statistics) http://www.insee.fr/ UNESCO Institute for Statistics http://www.indexmundi.com/ http://www.bls.gov/ http://hdr.undp.org/ International Labour Organization https://stats.oecd.org http://country.eiu.com/ https://www.kpmg.com/Africa/en/KPMG-in-Africa/Documents/Tunisia.pdf http://www.coface.fr/ http://www.transparency.org/cpi2014/results http://chohmann.free.fr/fp_kinsey.htm Ansoff, I. (1957). Strategies for Diversification, Harvard Business Review, 35, 5 (Sep-Oct), 113-124

E-TREE PROJECT SOURCES

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