Export Planning
How to write an international marketing plan
Chapter 3: Business Strategy and Internationalisation
Internationalisation of the firm
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Learning objectives (learning tasks)
Ch. 3
At the end of the chapter you are able to:
1. understand how business strategy and export policy are linked together;
2. describe the competitive environment of a company with Porter’s 5 forces model;
3. outline a company’s growth strategy in terms of Ansoff and Hamel & Prahaled;
4. explain a company’s product assortment in terms of its product life cycle
and BCG matrix;
5. describe the three competitive strategies of Treacy & Wiersema and its
accompanying value proposition; review the ways towards a competitive
advantage based on Ohmae.
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Strategic questions for a company
• How does the organisation wants to grow in future?
• How do you react to your competitors?
• What are your core competences and how do you create a competitive advantage?
• How do you manage the different product lines?
Export Planning
Institute _II_BPM
Slide 11
Joris Leeman© , 2010
Export Planning
Development of a strategy
Existing
Strategy
Product /
Service
Portfolio
Trends
Analysis
Future
Strategic
Positioning
Strategic
Models
DESTEP
Export Planning
Institute _II_BPM
Slide 9
Joris Leeman© , 2010
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Example of Porter‘s 5-forces for PepsiCo
 PepsiCo has to face huge rivalry between its competitors as well as threads
on the demand-side.
New entrants
 Current economical crisis  little
incentive to invest in new markets
Buyers
Suppliers
 Global raw material
sourcing possible
 Suppliers are
replacable
 PepsiCo = big customer
with high bargaining
power
Rivalry
 Strong rivalry in all markets
 Global average market shares
- Coca Cola: 43,7%
- PepsiCo: 31,6%
- Cadburry: 15,8%
 High bargaining power
 Few large wholesale
and retail businesses
 PepsiCo is fully
dependent on
providing products
that meet customer
demands and trends
Threats of substitutes
 Rising health awareness and therefore
risk of low switching behaviour
 Low product differentiation
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Ansoff – Growth model
Product / Market – combinations for growth
Capability
organisation?
Process
Innovation (ICT)
New
Product
Innovation
Diversification
Penetration
Market
Development
Product
Reaction
Competition?
Current
Current
Organisation?
New
Market
Export Planning
Institute _II_BPM
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Joris Leeman© , 2010
Export Planning
Core competences – model of Hamel & Prahaled
The battle to ‘master‘ four core competences
Four battles to ‘master‘:
•
Resources
•
Capabilities
•
Competitive advantage
•
Strategy
New
The best in
10 year’s time
Super chance
Open
spaces
White spaces
Core
Competences
Current
Current
New
Market
Export Planning
Institute _II_BPM
Slide 11
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Export Planning
BCG – matrix for product portfolio management
Boston Consultancy Group - matrix
High
?
Stars
Questionmarks
Cows
Sleeping dogs
Market
growth
Low
Large
Small
Relative market share
Export Planning
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Joris Leeman© , 2010
Export Planning
Exampe of a BCG – matrix for Danone
Sales by product line
Fresh dairy
Baby
nutrition
water
Medical
Nutrition
Medical Nutrition shows highest potential in the future
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
GE / McKinsey – matrix for product portfolio mgt
H
Market
attractiveness
M
INVEST / GROW
- Market size
- Market share
- Growth direction
- Positioning PLC
L
SELECT / REVIEW
HARVEST / DIVEST
H
M
L
Competitive strength
of SBU
Export Planning
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Joris Leeman© , 2010
Export Planning
Porter‘s generic competitive strategies
Competitive
advantage
Broad
target
Cost
leadership
Differentiation
Cost focus
Differentiation
focus
Lower
cost
Differentiation
Competitive
scope
Narrow
target
Export Planning
Institute _II_BPM
Slide 11
Joris Leeman© , 2010
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Treacy & Wiersema‘s competitive strategies
(Operational Excellence)
Standardized product or service * Limited, everybody is treated same - service
Relative low price * Easy to get by the customer
(Best Product)
State-of-the-art product or service * New type of product or service
Premium price * Can be acquired fast by the customer
(Customer Intimacy)
Total solution for customer * Tailor made set up for customer
Premium price * Provide data to the supplier
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Institute _II_BPM
Joris Leeman© , 2010
Export Planning
Chapter review questions
(10 min.)
1.
What model can you use to describe the competitive environment?
What three competitive strategies have been derived from that?
2.
What model can you use to define how a company can grow?
3.
Name two product portfolio management models. Explain both models.
4.
Explain the BCG matrix. Explain the GE matrix. Do you think the GE matrix is
better than the BCG? If yes, why? Motivate your answer.
5.
What is meant with a value proposition? Explain the four elements of the
value proposition and present its three value disciplines or competitive strategies.
Give an example of each competitive strategy.
6.
What is customer based strategies and corporate based strategies?
How does this relate to the strategic ways Ohmae developed to create a
competitive advantage?
Export Planning
Institute _II_BPM
Joris Leeman© , 2010