Export planning process and Entry Strategies

Question 1

When to go International (pre-conditions) ?

Answer 1

• Management commitment. (money and time)
• In-depth experience with product or service.
• Adequate cash flow and access to financing.
• Capacity and capability to produce international products.

Question 2

Why export ?

Answer 2

• Increase Sale.
• Increase profitability.
• Lower unit costs.
• Market/risk diversification.
• Extension of product life cycle.
• Acquisition of knowledge, technology or resources.

Question 3

True or False, for a company to success internationally they have to be successful in their home country?

Answer 3

False

Question 4

What is the Global Market Opportunity Assessment (GMOA) ?

Answer 4

It’s a systematic process that businesses use to evaluate and identify potential international markets for their products or services. This process helps firms determine where they can achieve the greatest success and how to strategically enter those markets.

Question 5

What are the Tools and Techniques Used in GMOA?

Answer 5

PESTEL Analysis (Political, Economic, Social, Technological, Environmental, Legal)

SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)

Porter’s Five Forces Analysis

Market Research (surveys, focus groups, industry reports)

Benchmarking against competitors

Question 6

What is the purpose Organizational readiness ?

Answer 6

• Identify the company strength you want to exploit.
• Identify the weakness of the company to correct.
• Evaluate firm’s competitive position, resources, product or service, management commitment.

Question 7

What are the 4 focus of the diagnostic in the evaluation of organizational readiness?

Answer 7

1. Management.
2. Finance.
3. Production.
4. Marketing.

Question 8

Question to ask when diagnostic of the management.

Answer 8

• Why do you want to export or import?
• What are your objectives?
• What are your strategic plan?
• Any knowledge of foreign market?

Question 9

Question to ask when diagnostic of the Finance?

Answer 9

• Is a budget forecast done?
• What is the cash flow situation?
• Does the company generally have good control on finances?
• Do we have access to credit?

Question 10

Question to ask when diagnostic of the Production?

Answer 10

• Is there regular manufacturing planning?
• Does the company have reliable suppliers (depended upon suppliers, but the varieties and alternative is really good)?
• Can they meet a sudden rise in demand?

Question 11

Question to ask when diagnostic of the Marketing?

Answer 11

• Sales objectives defined?
• Knowledge of domestic market share?
• Use of market studies?
• Knowledge of distribution channels?

Question 12

What is the purpose Product Suitability ?

Answer 12

• Assess suitability of the foreign firm markets by conducting a systematic assessment of company offerings for international customers.
• Evaluate the fit between the offerings and foreign customer needs.
• Identify the factors that may hinder market potential.
• Determine how the offering may need to be adapted for each market. (Preferences, Laws and Regulations, Nature of competitors).

Question 13

What is the purpose Country Screening ?

Answer 13

• Identify target markets (5 or 6 countries) that holds the best potential by size, growth rate, buying power, consumption capacity, infrastructure, economy, country risk.
• Reduce the number of countries that warrant in-depth investigation.

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Question 14

What is the purpose Assess Industry Market Potential ?

Answer 14

• Estimates share of sales that can be achieved in target country.
• Includes market entry barriers.
• Analyze size, growth, trends, tariff and non-tariff trade barriers, regulations, availability, preferences, market potential.

Question 15

What is the purpose Choose Entry Modes ? (pages 24 of the PowerPoint class #3)

Answer 15

• Assesses and selects entry modes based on criteria such as industry expertise, commitment, distribution channels, financial strength, facilities.

Question 16

Degree of Control to Classification of Entry Strategies. (pages 25 and 26 of the PowerPoint class #3)

Answer 16

• Foreign operation.
• Resource commitment.
• Flexibility.
• Risk.

Overall investment capabilities.

Question 17

What are the factors to consider when choosing a foreign market entre strategy ?

Answer 17

• Goals and objectives (market share, profitability, competitive positioning)
• Degree of control
• Resources and Capabilities (R&C)
• Risks
• Legal, cultural, economic circumstances
• Partners

Question 18

What is a strategic alliances?

Answer 18

Equity alliances (J.V.) or non-equity alliances (Franchising, Licensing).