1. INTERNATIONAL MARKETING RESEARCH
TRADE DATA ANALYSIS
MARKET ATTRACTIVENESS/ COMPANY STRENGTH ..ANALYSIS
SWOT ANALYSIS

2. Foreign market portfolios: technique and analysis
Company competitive
Market attractivness
high
medium
low
Invest/grow
dominate
divest
Joint venture
Selective strategies
Harvest/divest/
License/combine countries
international market entry
Rajesh Narang

3. 4/14/2018
SWOT Analysis
a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues.
SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.
A SWOT analysis process generates information that is helpful in matching an organization or group’s goals, programs, and capacities to the social environment in which it operates. 
international market entry
Rajesh Narang

4. Classify them by their “seriousness” and “probability of occurrence”.
4/14/2018
SWOT
Strengths:Positive tangible and intangible attributes, internal to an organization. They are within the organization’s control.
Weakness:Factors that are within an organization’s control that detract from its ability to attain the desired goal. Which areas might the organization improve?
Opportunities :External attractive factors that represent the reason for an organization to exist and develop. What opportunities exist in the environment, which will propel the organization?Identify them by their “time frames”
Threats :External factors, beyond an organization’s control, which could place the organization mission or operation at risk. contingency plans that May address them .
Classify them by their “seriousness” and “probability of occurrence”.
international market entry
Rajesh Narang

5. international market entry Rajesh Narang
4/14/2018
international market entry
Rajesh Narang

6. Your specialist marketing expertise.
4/14/2018
SW :PRIMO-F People II Resources III Innovation & Ideas II Marketing II Operations II Finance
strength could be:What do you do well? Is there anything you do better than most? Better than anyone else?
Your specialist marketing expertise.
A new, innovative product or service.
Location ,Quality processes that adds value to your product or service.
A weakness could be:What should be improved? What do you do poorly? What should you avoid, based on mistakes in the past?
Lack of marketing expertise.
Undifferentiated products ,Poor quality
Damaged reputation.
international market entry
Rajesh Narang

7. Threats :What obstacles do you face?
4/14/2018
OT Profile
Opportunities :Where can you find, or create, a competitive advantage? What are some major trends in your business? - Consolidation / Diversification? Specialization / Generalization? - Changes in technology. Such as computer software .- Changes in the types of businesses in your market.- Changes in social patterns, population profiles, lifestyle. - trends. Changes in demand
Threats :What obstacles do you face?
What are your competitors doing that may result in a loss of clients, customers, market share? Are the required specifications for your job, products or services changing?
Is changing technology threatening your position? Do you have cash-flow problems?
international market entry
Rajesh Narang

8. SWOT Analysis Examples
4/14/2018
SWOT Analysis Examples
Example 1 - Wal-Mart SWOT Analysis. Strengths - Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.Weaknesses - Wal-Mart is the World's largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control.Opportunities - To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe or the Greater China Region. Threats - Being number one means that you are the target of competition, locally and globally.
international market entry
Rajesh Narang

9. 4/14/2018
Example 2 - Starbucks SWOT Analysis. Strengths - Starbucks Corporation is a very profitable organisation, earning in excess of $600 million in 2004.Weaknesses - Starbucks has a reputation for new product development and creativity. Opportunities - New products and services that can be retailed in their cafes, such as Fair Trade products. Threats - Starbucks are exposed to rises in the cost of coffee and dairy products.
Example 3 - Nike SWOT Analysis.Strengths - Nike is a very competitive organisation. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without bullets.'Weaknesses - The organisation does have a diversified range of sports products. Opportunities - Product development offers Nike many opportunities. Threats - Nike is exposed to the international nature of trade. .
international market entry
Rajesh Narang

10. international market entry Rajesh Narang
4/14/2018
international market entry
Rajesh Narang

11. INTERNATIONAL MARKET ENTRY STRATEGIES
International market entry concept & modes
Factors affecting the selection of entry mode

12. Concept of international market entry
4/14/2018
Concept of international market entry
mode of entry: an institutional mechanism by which a
firm makes its products or services available
consumers in international markets.
mode of entry determined by:
- the ability and willingness of the firm to commit
resources
- the firms’ desire to have a level of control over
international operations
- the level of risk the firm is willing to take
international market entry
Rajesh Narang

13. Market entry strategies
international market entry
Rajesh Narang

14. Market entry strategies Exporting
Direct
Domestic base
Overseas sales branch
Traveling sales representative
Foreign-based distributors/agent
Indirect-occasional, or active exporting
Domestic-based export merchant
Domestic-based export agent
Cooperative organizations
Export-management company
international market entry
Rajesh Narang

15. Market entry strategies Contractual Agreements
Franchising: A contractual arrangement where a wholesaler or retailer (the Franchisee) agrees to make some payment and to meet the operating requirements of a manufacturer or other franchiser in exchange for the right to use the firm’s name and to market its goods or services
Foreign Licensing: an agreement that grants foreign marketers the right to distribute a firm’s merchandise or to use its trademark, patent, or process in a specified geographic area.
Subcontracting: a contractual agreement where a firm hires a local company to produce goods or services in a specific geographic area.
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Rajesh Narang

16. Market entry strategies International Direct Investment
An additional strategy for entering global markets
Requires direct investment in foreign firms, production, and/or marketing facilities
Advantages
cheaper labor cost in some countries
government incentives
creates better image
deeper relationships with government, customers, suppliers and distributors
full control of operations and marketing
Risks involved:
economic difficulties of the host country
political instability and negative perception
international market entry
Rajesh Narang

17. Modes of international market entry Production in home country
exports: production is carried out in home country and finished goods are shipped to the overseas markets for sale
indirect exports: process of selling products to an export intermediary in the company’s home country who in turn sells the products in the overseas markets
direct exports: process of selling the firm’s products directly to an importer in the overseas market
international market entry
Rajesh Narang

18. Modes (contd)
complementary exporting: use of distribution channels of an overseas firm to make the product available in the overseas market
provide offshore services: to overseas clients with the help of information and communication technology
international market entry
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19. Production in a foreign country
Modes (contd)
Production in a foreign country
contractual entry modes
international licensing: process by which a domestic company allows a foreign company to use its intellectual property and specific business skills for a compensation (royalty)
international franchising: transfer of intellectual property and other assistance over an extended period of time with greater control compared to licensing
international market entry
Rajesh Narang

20. Selecting the International Entry Mode, continued
Licensing
Licensor offers know-how, shares technology, and shares brand name with licensee
Licensee pays royalties
Lower-risk entry mode; limits exposure to economic, financial, and political instability
Permits the company access to markets that may be closed or that may have high entry barriers
DOWNSIDE: Can produce competitor in the licensee
international market entry
Rajesh Narang

21. Selecting the International Entry Mode, continued
Franchising
Franchisor gives franchisee right to use brand name, trademarks and business know-how
Less risk, higher level of control
Very rapid market penetration
DOWNSIDE: Can create future competitors who understand the operations of the franchise
international market entry
Rajesh Narang

22. Modes (contd)
overseas turnkey projects: conceptualize, design, install, construct, and carry out primary testing of manufacturing facilities or engineering structures for an overseas client organisation
types : built and transfer (BT), built, operate, and transfer (BOT), built, operate, own (BOO)
international management contracts: a company provides its technical and managerial expertise for a specific duration to an overseas firm
international market entry
Rajesh Narang

23. Modes (contd)
international strategic alliance: the relationship between two or more firms that cooperate with each other to achieve common strategic goals but do not form a separate company
international contract manufacturing: a contractual arrangement under which a firm’s manufacturing operations are carried out in a foreign countries
international market entry
Rajesh Narang

24. International Strategic Alliances
Typically, the term refers to nonequity alliances; for example:
Manufacturing
Contract manufacturing, engineering, technological, and research and development alliances
Marketing
One firm handles marketing for another, or some aspect of the marketing process
Distribution
One firm handles the distribution for another, or some aspect of the distribution process
international market entry
Rajesh Narang

25. Investment entry modes
Modes (contd)
Investment entry modes
assembly in overseas markets: refers to exporting various components of the product in completely knocked down (CKD) condition and assembles them overseas
international joint ventures: equity participation of two or more firms resulting into formation of a new entity
international market entry
Rajesh Narang

26. Selecting the International Entry Mode, continued
Joint Venture
Preferred entry mode of governments of developing countries
Help develop local expertise
If production is exported, helps with country’s balance of trade
Foreign company and local company establish a jointly-owned new company
Parties share capital, equity, labor
70% of all joint ventures break up within 3.5 years
DOWNSIDE: Joint-venture partners can turn into viable competitors; and 70% of all joint ventures break up within 3.5 years.
international market entry
Rajesh Narang

27. Selecting the International Entry Mode, continued
Consortia
Involve three or more companies
Monopoly effect
Allowed
where expensive R&D is involved
in underserved markets
in markets where the government and/or the marketplace can control its activity
international market entry
Rajesh Narang

28. Factors for selecting partners for cooperation
the alliance partner should have some strength which
can be translated into business values for the alliance
the alliance partners should be committed to
cooperative goals
it is preferable that the alliance partner should have
multi-cultural business environment
international market entry
Rajesh Narang

29. Investment mode (contd) Wholly owned foreign subsidiaries
to have complete control and ownership of
international operations a firm opts for foreign
direct investment through:
1. acquiring a foreign company and all its resources in
a foreign market (acquistion)
2. the establishment of production and marketing
facilities by a firm on its own from scratch (green field)
international market entry
Rajesh Narang

30. Selecting the International Entry Mode, continued
Wholly Owned Subsidiaries
Can be developed by the company – greenfielding – or can be purchased (acquisition or merger)
Involve long-term market commitment
High cost
High control of operations
Greatest level of risk
international market entry
Rajesh Narang

31. Selecting the International Entry Mode, continued
Branch Offices
Entities are part of the international company, rather than a new company (as in the case of the subsidiary)
Involves substantial investment
sales office
showroom
Engages in a full spectrum of marketing activity
High level of control
international market entry
Rajesh Narang

32. Comparison of Market Entry Strategies
Form Control Risk Advantage
Export Very limited Low Low cost
Licensing Limited Moderate Low cost
Joint Ventures Shared Moderate Local expertise
Ownership Total High Control
Internet Total High No physical
presence required
As organizations became “less ignorant” and more confident about marketing in the international arena, they tended to become more reliant on their international operations. And in becoming more reliant on their international operations, they acquired the expertise to enter new markets differently depending upon market conditions, laws and the degree of risk they wanted to face in any given market.
If you look at the above as a continuum export is on one end and ownership of non-domestic operations is on the other. With licensing on the end toward export and JVs on the end toward ownership. The main thing to note is that as you move to full ownership a company gains control but looses local market expertise and has added risk.
The important thing to remember here is, again, with the possible exception of total “ownership” of non-domestic operations, a company is doing business very differently “abroad” than the way it conducts its activities in its home market.
And finally, as we discussed earlier, what we have described here is the way “business” has been traditionally done as organizations became more reliant on sales from its non-domestic market to supply cash for its revenue stream.
international market entry
Rajesh Narang

33. Factors affecting the selection of entry mode
External factors
Market size
Market growth
Government regulations
Level of competition
Level of risk
political
economic
operational
Production and shipping costs
international market entry
Rajesh Narang

34. Factors affecting the selection of entry mode (contd)
Internal factors
Company objectives
availability of company resources
level of commitment
international experience
flexibility
international market entry
Rajesh Narang

35. Foreign market portfolios: technique and analysis
Company competitive
Market attractivness
high
medium
low
Invest/grow
dominate
divest
Joint venture
Selective strategies
Harvest/divest/
License/combine countries
international market entry
Rajesh Narang

36. Thank you