Export Planning
How to write an international marketing plan
Chapter 2: External and Internal Analysis
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. 2
At the end of the chapter you are able to:
1.
describe a company briefly in terms of its vision and mission, its business definition,
and its product lines and markets;
2.
explain how to set up an internal analysis by means of its organisation structure, the
7S-model and its organisational capabilities;
3.
explain how to set up an external analysis by means of the DESTEP – and trend - analysis;
4.
put together a SWOT analysis and TOWS matrix with its strategic options.
Export Planning
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Joris Leeman© , 2010
Export Planning
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Joris Leeman© , 2010
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Vision and Mission
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Example from Kellogg‘s
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Export Planning
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Export Planning
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Environmental analysis and trend direction
DESTEP - analysis
D
E
S
Trend - analyis
•
•
High
•
•
•
•
Low
E
•
•
•
•
P
•
•
T
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Conclusion
……………
High
Low
A.
Identify the two most
Important trends
Impacting your business
Institute _II_BPM
B.
Put the two trends in a
axis – overview and
draw a conclusion
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Export Planning
DESTEP or PEST analysis
The PEST analysis consists of five main steps:
1. Understand a category's relevant trends
- research the important variables of the organisation's strategy
- determine the long term trends that apply to these variables
- research the past behaviour of these variables
- analyse the predictability of the trend lines and their fluctuations
- assess the impact of these trends on the organisation
2. Understand trend interdependencies
- analyse which trends are interrelated
- determine which trends conflict by understanding
movements in opposite directions
3. Distill likely issues from the identified trends
- validate the impact of trends on the organisation
- distill the most critical trends that have the greatest impact given
the organisation's objectives
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Export Planning
DESTEP or PEST analysis
4. Forecast the direction of issues
- determine the fundamental drivers behind a critical trend
- assess the behaviour of the critical trend
- run a sensitivity test to assess impact (take -10% of your worst case scenario)
5. derive implications for the organisation
- assess the affect of critical environmental changes on the industry
- assess affect of critical environmental changes on a firm's competitive position
- assess the affect of critical environmental changes on a direct competitor's
position
- validate a firm's competitive position given the likely positions of its direct
competitors'
Export Planning
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Internal – and External analysis
SWOT - analysis
Weaknesses
Strengths
Internal
Examples
• specialist marketing expertise
• exclusive access to natural resources
• patent
• new, innovative product or service
• location of your business
• cost advantage through proprietary
know how
• quality processes and procedures
• strong brand or reputation
• lack of marketing expertise
• undifferentiated product or service
(i.e. in relation to your competitors)
• location of your company
• competitors have superior access to
distribution channels
• poor quality of goods or services
• damaged reputation
External
Opportunities
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Threats
• developing market (for example China,
internet)
• mergers, joint ventures or strategic
alliances
• moving into new attractive market
segments
• a new international market
• Loosening of regulations
• removal of international trade barriers
• a market that is led by a weak
competitor
• in new competitor in your own home
market
• price war
• competitor has a new, innovative
substitute product or service
• new regulations
• increased trade barriers
• a potential new taxation on your
product or service
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Internal – and External analysiS
Example SWOT – analysis of PepsiCo
Strengths
Weaknesses
 Broad product line and outstanding reputation
 Global market leader in snack foods and non-carbonated
beverages (= power and knowledge)
 Intelligent Logistics network and strong existing
distribution channels
 Inability to leapfrog Coca Cola as being the most
famous beverage provider
 Reliant upon line extensions
 Reliant upon particular carbonated drinks
Opportunities
Threats
 Growing population
 Progress in technology
 less costly production processes
 Spread of liberalisation and democracy across countries
 Increasing health awareness
 Ongoing economic crisis
 Difficulties regarding financing of major projects
Source: R.Hüfler a.o., students HAN University
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Internal – and External analysis
TOWS – analysis: strategic options
External Opportunities
(O)
1.
2.
3.
4.
Internal Strengths
(S)
1.
2.
3.
4.
Internal Weaknesses (W)
1.
2.
3.
4.
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External Threats
(T)
1.
2.
3.
4.
SO
"Maxi-Maxi" Strategy
ST
"Maxi-Mini" Strategy
Strategies that use strengths to
maximize opportunities.
Strategies that use strengths to
minimize threats.
WO
"Mini-Maxi" Strategy
Strategies that minimize
weaknesses by taking advantage
of opportunities.
WT
"Mini-Mini" Strategy
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Strategies that minimize
weaknesses and avoid threats.
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Export Planning
Chapter review questions
(10 min.)
1.
What is an export policy plan? What are the three steps of the export policy plan?
2.
Create a possible business definition for a brand label manufacturer selling cigarettes.
3.
Explain the 7S Model of McKinsey.
4.
What is a DESTEP – analysis? Why do you apply this analysis on the existing
Markets first, before looking at new, foreign markets?
5.
What can you do with a SWOT - and TOWS – analysis? Explain and provide an example?
Export Planning
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Joris Leeman© , 2010