Export Planning Institute _II_BPM Joris Leeman©, 2010 Export Planning How to write an international marketing plan Internationalisation of the firm Chapter 3: Business Strategy and Internationalisation

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

Slide 11 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 Strategic questions for a company

Export Planning Institute _II_BPM Joris Leeman©, 2010 Slide 9 Existing Strategy Future Strategic Positioning Trends Product / Service Portfolio Analysis DESTEP Strategic Models Export Planning Development of a strategy

Export Planning Institute _II_BPM Joris Leeman©, 2010

 Rising health awareness and therefore risk of low switching behaviour  Low product differentiation  High bargaining power  Few large wholesale and retail businesses  PepsiCo is fully dependent on providing products that meet customer demands and trends  Global raw material sourcing possible  Suppliers are replacable  PepsiCo = big customer with high bargaining power  Strong rivalry in all markets  Global average market shares - Coca Cola: 43,7% - PepsiCo: 31,6% - Cadburry: 15,8% Suppliers Buyers Rivalry Threats of substitutes  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 Export Planning Example of Porter‘s 5-forces for PepsiCo

Export Planning Institute _II_BPM Joris Leeman©, 2010 Slide 11 Product / Market – combinations for growth Penetration Product Innovation Market Development Diversification Market Product New Current New Organisation? Reaction Competition? Capability organisation? Process Innovation (ICT) Export Planning Ansoff – Growth model

Export Planning Institute _II_BPM Joris Leeman©, 2010 Slide 11 The battle to ‘master‘ four core competences Open spaces The best in 10 year’s time White spaces Super chance Market Core Competences New Current New Four battles to ‘master‘: Resources Capabilities Competitive advantage Strategy Export Planning Core competences – model of Hamel & Prahaled

Export Planning Institute _II_BPM Joris Leeman©, 2010 ? QuestionmarksSleeping dogs Stars Relative market share LargeSmall Market growth High Low Cows Boston Consultancy Group - matrix Export Planning BCG – matrix for product portfolio management

Export Planning Institute _II_BPM Joris Leeman©, 2010 Fresh dairy water Baby nutrition Medical Nutrition Sales by product line Medical Nutrition shows highest potential in the future Export Planning Exampe of a BCG – matrix for Danone

Export Planning Institute _II_BPM Joris Leeman©, 2010 Export Planning GE / McKinsey – matrix for product portfolio mgt Competitive strength of SBU Market attractiveness H H M M L L SELECT / REVIEW INVEST / GROW HARVEST / DIVEST - Market size - Market share - Growth direction - Positioning PLC

Export Planning Institute _II_BPM Joris Leeman©, 2010 Slide 11 Cost focus Cost leadership Differentiation focus Differentiation Competitive advantage Competitive scope Differentiation Lower cost Broad target Narrow target Export Planning Porter‘s generic competitive strategies

Export Planning Institute _II_BPM Joris Leeman©, 2010

Standardized product or service * Limited, everybody is treated same - service Relative low price * Easy to get by the customer State-of-the-art product or service * New type of product or service Premium price * Can be acquired fast by the customer Total solution for customer * Tailor made set up for customer Premium price * Provide data to the supplier (Operational Excellence) (Best Product) (Customer Intimacy) Export Planning Treacy & Wiersema‘s competitive strategies

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?