30-Sep-22

Session 3

Export Planning

Additional Slides

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A Typical Format for an

Export Business Plan

1.0 Executive Summary

2.0 Introduction
2.1 The Firm – who they are, what they do, key performance indicators (Finance, marketing, operations, HR)
2.2 Define the reason for and details of the export opportunity

3.0 Situation Analysis

3.1 The Company – evaluation of ‘readiness’ for exporting
3.2 Target Country (Region/Area) Evaluation
3.3 Key Environment Factors Evaluation (PLESCT)
3.4 Key Competitors (and how they compete)
3.5 Identification of Target Market Segment(s)
3.6 SWOT (Weighted) for the Export Project ONLY
3.7 Company ‘Gap’ Analysis

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4.0 Business Objectives (for the project)

4.1 Financial, Marketing, Operations and Key Personnel

5.0 Marketing Strategy Evaluation

5.1 Export Entry Model Evaluation and How to Reach End Users
5.2 Competitive Advantage and Market Positioning Evaluation

5.3 Marketing Mix Evaluation:

5.3.1. Product / Service - Competitive Strategy Plan
5.3.2. Product/Service Specification(s)
5.3.3. Distribution and Logistics
5.3.4. Pricing Evaluation
5.3.5 Promotions Evaluation

6.0 Screening Economics

6.1 Three year outline P/L for the export project
6.2 Explanation of revenue / expense calculations and forecasts

7.0 Plan Implementation and Control

8.0 Conclusion

9.0 Bibliography

10.0 Relevant Appendicies

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Market ‘Power’ Analytics

Porter’s Five Forces Analysis

Threat of New Entry

• Economies of scale • Capital requirements
• Proprietary product • Access to distribution
differences • Absolute cost advantages
• Brand identity • Government policy
• Switching costs • Expected retaliation
Bargaining Power Bargaining Power
of Suppliers of Customers
• Differentiation of inputs • Buyer concentration
• Switching costs
Rivalry Among • Buyer volume
• Presence of substitute Existing Competitors • Buyer switching costs
inputs • Industry growth • Switching costs • Buyer information
• Supplier concentration • Fixed costs / value • Concentration and balance • Ability to integrate
• Importance of volume to added • Informational complexity backward
supplier • Overcapacity • Diversity of competitors • Substitute products
• Cost relative to total • Product differences • Corporate stakes • Price / total purchases
purchases • Brand identity • Exit barriers • Product differences
• Impact of inputs on cost or • Brand identity
differentiation • Impact of quality /
• Threat of forward performance
integration • Buyer profits
Threat of Substitutes
• Relative price performance of substitutes
• Switching costs
• Buyer propensity to substitute

Source: Michael E. Porter, Competitive Advantage (New York: Free Press, 1985)

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Market Entry Options

The Main ‘Market Entry’ Business Models

(of which there are 12)

(Note: We will study each of these separately in Lecture 9)

➢ Export Merchants … specialist firms ‘manage’ your export sales (get rich !)
➢ Direct Exporting … from “home base” … Ferrari
➢ Exporting … via agents / distributors … most SME’s
➢ Licensing / Franchising … Disney / McDonald’s
➢ Assembly in overseas market …’ckd’ … Hyundai Motor Co
➢ Contract manufacturing (outsourcing) … Nike / Apple
➢ Joint Ventures / Strategic Alliances … Airlines / Pokemon Go
➢ Acquisitions (full, partial) … Wal Mart Japan
➢ “Green Fields”… building a new offshore facility … Toyota Thailand

You need to evaluate which of these models matches your business

needs best. Typically, firms select 2 or 3 to consider initially and
through analysis decide the ‘best’ model

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Core Competence.

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Core Competencies

1. Core Competencies are those “success criteria” that you

must have in order to succeed in the offshore market.

2. Your firm may already ‘have’ them or can ‘acquire’ them

➢ Examples:-
⚫ Apple in design
⚫ 3M in ‘innovation’
⚫ Honda in motors and power trains
⚫ Intel in semiconductors
⚫ Amazon in online business model(s)
⚫ McDonalds in ‘localisation’
⚫ Tesla in the design of high performance / efficient battery power

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SWOT (Weighted)

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SW – OT (know as ‘SWOT’) Analysis

S = (company) strengths …
W = (company) weaknesses …

O = (market) opportunities …
T = (market) threats …

This analysis enables you to consider what the advantages /

disadvantages of a market are, matched against the competencies /
incompetency of your company

Often the firms assessed strengths / weaknesses will vary from

market to market

Discuss the input to this analysis

with a mix of executives in the firm

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S.W.O.T. (weighted)
1. To create a weighted SWOT - discuss issues with different
executives

2. ‘Weight’ each item in each category - / 100 or 1.00

(this allows you to create a hierarchy of items in each
category)

3. Link ‘S’ to ‘O’

(this becomes the basis of your marketing plan)

4. Link ‘W’ to ‘T’

(this becomes the basis of your ‘defensive’ plan)

5. Now evaluate the implications of this analysis for the

development of your marketing plan …

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Example SWOT Analysis for

‘OpLab’ (Optical Laser Surgery Equipment)
Strengths
Patented Technology (45%)
We have 7 year patents on 2
new devices
FDA Approval (35%)
We already have this
Technical Expertise (30%
We have proven capabilities
In this area
Weaknesses
Lack of Funding (40%)
We need $20m equity investment
to fund next 2yrs operations
Lack of Strategic Relationships (30%)
No close relationships with devi ce
distributors
High Costs (30%)
The equipment needed for laser
surgery is expensive

Opportunities Threats
Untapped Market (60%) Competition (70%)
Only 1% of market potential New non-surgical procedures
is developed
Fast Growth (25%) Price (30%)
Market is x2 each year Price erosion as market grows and develops
R&D (15%)
3 Universities (inc Stanford)
want to JV partner with us

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Value Chain Evaluation

(Profit Margins in International Operations)

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Value Chain
(lets you review each of the ‘steps’ for how you build, distribute
and sell any product)

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Supply Chain Evaluation

(Logistics Management)

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International Supply Chain Analysis

(how will you manage the chain and links ?)

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Business Objectives

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Objectives
Objectives, goals or targets are set in 4 main categories and need to be
specific for specific periods – typically years 1, 2 and 3 of the plan:-

1. Finance – $ profit and quality of profit (e.g. RoA) for (say) - Y’s 1, 2 and 3
2. Marketing – target segments, products needed, gross margins needed - Y’s 1,2 & 3
3. Operations – cost to income ratio (as a %) - Y’s 1, 2 and 3
4. People – key experience, expertise needed in specific areas - Y’s 1, 2 and 3
(senior management only – find, recruit, induct, train, reward, develop)

Future
Business Plan
(Marketing Strategy / Tactics)

Now
Y1 Y2 Y3
Objectives ? ? ?

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Market Strategy / Positioning

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Strategy Formulation

1. How are you going to compete ?

- beware of just exporting ‘domestic’ CA !
(‘The Great Australian Pie Company’)

2. Key local competitors and how they compete ?

- may be Government affiliates – e.g. China ‘SoE’s

3. How are you going to build it ? - McDonald’s

4. Can you make it sustainable ?

- ‘Nike’s repeated reformulation of their business
model

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Strategic Groups and Positioning

Key Issues:-

➢ Industry / market structure …

➢ Size, share and position of existing groups?

➢ Which ‘group’ (positioning) could / should

you be in?

➢ potential for movement to new groups?

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Examples of strategic
groups ?

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Marketing Strategy Considerations

1. Deterrence Strategies - Deterrence is a battle won in the minds of the enemy.
You convince the competitor that it would be prudent to keep out of your markets.

2. Pre-emptive strike - Attack before you are attacked.

3. Frontal Attack - A direct head-on confrontation.

4. Flanking Attack - Attack the competitor’s flank.

5. Alliance Strategies - The use of alliances and partnerships to build strength and
stabilize situations.

6. Position Defense - The erection of fortifications.

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Marketing Strategy Considerations

7. Mobile defense - Constantly changing positions.

8. Encirclement strategy - Envelop the opponents position

9. Counter-offensive - When you are under attack, launch a counter-offensive at the

attacker’s weak point.

10. Strategic withdrawal - Retreat and regroup so you can live to fight another day.

11. Flank positioning - Strengthen your flank.

12. Leapfrog strategy - Avoid confrontation by bypassing competitive forces.

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Product Life Cycle

Offensive and Defensive Marketing Strategies

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