You are on page 1of 51

Analysis of international markets

Micro-environment

Analysis

Is
determined
by

Combines with

Meso-environment
Combines with

Necessary for

Strategy
formulation

Is
determined
by

Analysis of the organizations


potential to go international
Analysis of potential clients:
- Consumer behavior
- Language

Macro-environment

Analysis of foreign markets


- PESTEL analysis
- Trade barriers & agreements
- Culture

Positioning and
Selection of entry mode

Building brand associations


Entry mode research

Marketing mix

Standardization or adaptation of price,


promotion, product and place

Influences

Tactical
decisions

Is
determined
by

Combines with

After-sales service

International aspects of after-sales


service

Marketing metrics

Marketing dashboards

Combines
with

Marketing
control

Is
determined
by

Intl. research

Combines with

Data equivalence
Response styles

Topics for today

1.
Internal analysis:
Reviewing the
basics

2.
Analysis of the
firms international
capabilities

3.
Analysis of
competitors

Mission statement
Why do we exist?
o
o
o
o
o

Who are we?


Who are our customers?
What do consumers want?
What do we do?
Why are we active?

Who are you


working for?

McDonald's vision is to be the world's best quick service


restaurant experience. Being the best means providing
outstanding quality, service, cleanliness, and value, so that we
make every customer in every restaurant smile

Google's mission is to organize the world's information and make


it universally accessible and useful.

The Walt Disney Company's objective is to be one of the world's


leading producers and providers of entertainment and information,
using its portfolio of brands to differentiate its content, services
and consumer products. The company's primary financial goals
are to maximize earnings and cash flow, and to allocate capital
profitability toward growth initiatives that will drive long-term
shareholder value.

Analyzing the company


Relationship with other departments?
o

Different departments, different goals

Suppliers
o
o
o

Track their evolution


Will they raise prices in the future?
How flexible are they?

Intermediaries and service providers


o
o
o
o

Warehouses
Logistics
Marketing consultants

Analyzing the company


Stakeholders
o
o
o
o
o
o
o

Financial groups
Media
Government
Locals
Public opinion/society
Internal groups

Potentially affect
marketings efficacy
and efficiency

Value chain

Value as perceived by the buyer


= total value
Price = value for the company
Cost of value creation
Company infrastructure
Human resources management
Research and development

Service

Sales &
Marketing

Outbound
logistics

Operaties

Inbound logistics

Procurement

Analyzing the company


Metrics
o

Financial
What is the marketing budget?
Debts

Effectiveness
Analysis of previous marketing actions
Current market share

Analyzing the market offerings

Product strategy
Most companies sell more than 1 product or service
Main goal: Making profit on all products
o

Sometimes it is necessary to restructure the product


portfolio
E.g.: Unilevers Path to Growth-plan (2000 => 2005)

Desinvestment in 1200 brands

E.g.: Kraft Foods portfolio: -10%

BCG-matrix
Relative market share
Low

Stars

Problem children

Cash cows

Dogs

Low

Growth rate

High

High

BCG-matrix
Relative market share
High

Invest

High

Problem

Stars

Low

Invest

Low

Cash cows

Dogs

Milk

Terminate

Growth rate

children

BCG-matrix

Growth rate

High

Relative market share


High

Low

Stars

Problem children

C
B

Low

Cash cows

Dogs
E

F
G

Topics for today

1.
Internal analysis:
Reviewing the
basics

2.
Analysis of the
firms international
capabilities

3.
Analysis of
competitors

Barriers

Stimuli

International
marketing

Reasons not to go international

Robert E. Morgan

Explicit attention should be devoted to


exporting obstacles that can be
characterized as all those attitudinal,
structural, operational and other
constraints that hinder the firms ability to
initiate, develop or sustain international
operations (p. 678)

Constantine Katsikeas

Source: Morgan, R.E. and Katsikeas, C.S. (1997). Obstacles to export initiation and
expansion. Omega International Journal of Management Science, 25(6), 677-690.

Strategic
barriers

Operational
barriers

Process-based
barriers

Informational
barriers

Source: Morgan, R.E. and Katsikeas, C.S. (1997). Obstacles to export initiation and
expansion. Omega International Journal of Management Science, 25(6), 677-690.

Strategic barriers
Availability of resources to take advantage of international
market opportunities
o Production
o Capital
o Personnel

Government and regulatory export policies


o

Tariffs, rules and regulations to limit or prohibit import


trade

Operational barriers
Primarily functional level considerations in marketing
o

Inability to understand marketing mix in an international


context

Product
Price
Place/logistics
Promotion
After-sales service

Process-based barriers
International business requires interactions between the
firm and other parties

Communication might not always go smoothly


But government might also play a role
o

Bureaucratic requirements of documentation and


certification

Informational barriers
Management is all about finding a fit between an
organizations strategy and its environment

Organizations thus need to learn how to identify, analyse,


and evaluate information from pertinent environmental
sources

Reasons to go international
External
Firm is passive
toward international
trade, but does it
because of external
pressure
Reactive

Firm searches for


opportunities
abroad, driven by an
external stimulus

Proactive
Firms go
international
because of internal
conditions or events

Internal
Source: Westhead et al. (2002)

Firm is interested in
exploiting unique
internal
competencies or
market opportunities

To do
Sit together in groups for 15
Review the list with statements, and classify them as a
barrier or a stimulus for firms going international
o Consider the type of barrier or stimulus
o Explain why it is a barrier or stimulus

Is the company able to go abroad?

Low number of
barriers to
international trade

High number of
stimuli to
international trade

Going international is often a process

Ethnocentric

Polycentric

Regiocentric

Geocentric

EPRG framework
Represents the form in which a firm responds to global
marketing opportunities
o Based on managements assumptions and beliefs

Four worldviews
o
o
o
o

Ethnocentric
Polycentric
Regiocentric
Geocentric

Ethnocentric orientation
Home country is superior, and needs of the home country
are most relevant

HQ extends way of working to its foreign affiliates


o

What works in the home country is implemented in the


foreign country

Centralized control

Polycentric orientation
Each country is unique
o
o

Should be targeted in a different way


Company threats countries one-by-one

Entreprise recognizes that there are different conditions of


production and marketing in different locations
o Adaptation of marketing mix

Decentralized control

Regiocentric orientation
Companies start viewing similarities and differences
between countries

The world consists of regions


o

E.g. U.S., Asia, Europe, Africa,

Integration and coordination of marketing program within


regions, but not across regions

Geocentric orientation
The world is getting smaller and smaller
The firm may offer global product concepts but with local
adaptation
o Adaptation is kept to a bare minimum
o Done to add value to the customer

Think global, act local

Should the company stay at home or go


abroad?
Industry globalism

Preparedness for
internationalization

Mature

Adolescent

Immature

Source: Solberg (1997)

Local

Potentially global

Global

3. Enter new
business

6. Prepare for
globalization

9. Strengthen your
global position

2. Consolidate your
export markets

5. Consider
expansion in
international
markets

8. Seek global
alliances

1. Stay at home

4. Seek niches in
international
markets

7. Prepare for a
buyout

Topics for today

1.
Internal analysis:
Reviewing the
basics

2.
Analysis of the
firms international
capabilities

3.
Analysis of
competitors

Micro-environment

Analysis

Is
determined
by

Combines with

Meso-environment
Combines with

Necessary for

Strategy
formulation

Is
determined
by

Analysis of the organizations


potential to go international
Analysis of competitors
Analysis of potential clients:
- Consumer behavior & language

Macro-environment

Analysis of foreign markets


- PESTEL analysis
- Trade barriers & agreements
- Culture

Positioning and
Selection of entry mode

Building brand associations


Entry mode research

Marketing mix

Standardization or adaptation of price,


promotion, product and place

Influences

Tactical
decisions

Is
determined
by

Combines with

After-sales service

International aspects of after-sales


service

Marketing metrics

Marketing dashboards

Combines
with

Marketing
control

Is
determined
by

Intl. research

Combines with

Data equivalence
Response styles

Rivalry among
existing competitors

Threat of substitute
products or services

Bargaining power
of buyers

Bargaining power
of suppliers

Threat of
new entrants

In-depth analyses are necessary


1.
2.
3.
4.
5.
6.
7.

Who are my competitors?


What are their goals?
What is their market share?
Which strategy do they follow?
What are their strenghts, what are their weaknesses?
How will they react?
With whom are we going to compete?

Who are my competitors?

Same product

Direct
competitors

Same type of
product

Generic
competition

Indirect
competitors

Competitors of video conferencing?

What are their goals?


Short-term vs long-term profits?
Growth in market share
Innovativeness?

Which strategy do they follow?


Do they follow the same strategy?
o

Strategic group

What is the probability of entering new markets?

What are their strengths, what are their


weaknesses?
Collect information on last years activities
Secondary data, meetings with former employees, collect
primary data,

Benchmarking

How will they react?


To a price reduction, more advertising,
o
o

Inert?
Fast?

Do they always react?

With whom are we going to compete?


Strong or weak competitors?
o
o

Both?
Analysis of customer value

Close or indirect competitors?


o

Competition is necessary

Source: http://publications.gc.ca/collections/collection_2012/agr/A74-1-35-2011-eng.pdf

Competitor benchmarking
Compare your own organizations performance with:
o
o

the main competitors performance


customer expectations

On value-creating dimensions
o
o

Break your product/service down in several components


Rate all criteria for all parties (yourself, own firm, main
competitor)

Competitor benchmarking
Customer
Low
importance
1

Easy to buy from


Uses new
technology
Understands what
customers want
Low price
Delivery on time
Flexible and quick

Source: Hollensen (2013), p. 121

Own firm

Highi Bad
importancei performance
3

Main competitor

Goodi Bad
performancei performance
3

Goodi
performancei
3

See you next week!