Export Planning How to write an international marketing plan Chapter 5: Value chain and supply chain setup Internationalisation of the firm

Export Planning Learning objectives (learning tasks) Ch. 5 At the end of the chapter you are able to: Describe a supply chain process and you understand why you can use the supply chain as a competitive weapon; Apply the value chain model of Porter; 3. Name and explain the different business process models; Identify key processes relevant for internationalisation within a company; 5. Analyse the existing supply chain set up of a company.

Export Planning Supply chain set up in existing markets Example Source: R. Hüfler a.o., students HAN University

Export Planning Operational elements to create a competitive advantage Quality On-time/ Speed Reliability Flexibility/ Responsiveness Costs Source: Leeman, 2009

Export Planning Generic supply chain strategies Low Supply Uncertainty High Supply Low Demand High Demand Efficiency / Lean Reliability and cost orientation to fulfill Make-to-Inventory Risk Hedging Reliable, flexible and on-time to fulfill Make-to-Inventory Responsive Responsive and speed to fulfill Make-to-Order Agile Responsive and flexible to customer needs and Make-to-Order

Export Planning Value chain model of Porter Margin Value Chain of Porter Infrastructure Human Resource Mgt Secondary activities Technology Development Procurement / Sourcing Margin Inbound Logistics Operations Outbound Logistics Marketing And Sales Service Primary activities

Export Planning Value chain model of Porter Value Chain Main tool for identifying ways to create more customer value; Every firm consists of a collection of activities performed to design, produce, market, deliver and support the firm‘s products; The value chain breaks the firm into nine value-creating activities to understand the behaviour of costs in the specific business and the potential sources of competitive differentiation; The nine value-creating activities include 5 primary and 4 support activities.

Export Planning Value chain model of Porter Value Chain The firm‘s success depends not only on how well each department performs its work, but also on how well the activities of various departments are coordinated. Focus on Core Business Processes - Product development process - Inventory management process - Order-to-payment process - Customer service process Successful companies develop superior capabilities in managing these and other core processes. In turn, mastering core business processes gives these companies a substantial competitive edge. Source: Kotler

Export Planning Example: Supply chain set up for PepsiCo Value Chain Support activities: Procurement and therewith cost is directly connected to (end) profit. Primary activities: Product availability and product acceptance are critical success factors. Supply Chain set up PepsiCo Suppliers Bottler Distributor Customers and Consumers PepsiCo concentrate plant Bottling plants Retail stores/warehouses Plant Warehouses/ Distribution Center Ingredi-ents Transport Consumers Packa-ging Big shops

Export Planning Value chain model of Porter Value Chain - Identifying capabilities and competitive differentiators; - Output value > Cost value = Margin Drivers of Value Creation 1. Cost percentage 2. Relative cost compared to the competition 3. Factors influencing the cost 4. Sources of value differentiation 5. Value differentiation compared to the competition

Export Planning Example: Supply chain set up for Nestlé

Export Planning Chapter review questions (10 min.) Which three flows are parts of supply chain management? What are the five operational elements to create a competitive environment? Name four generic supply chain strategies to manage supply and demand. Explain the value chain model of Porter. What is the use of this model? Why is the choice of the right business process model so important? Explain the meaning of a push-principle and pull-principle is. Give examples. Make a drawing of a supply chain set up for a company of your choice.