1. ValueMathics MARKET ENTRY MODE

2. Matchmaking Matchmaking is reflected in the market mode. This is the way in which a company uses its strongest value activities (TPLMS) to enter a market and leave other value activities to the trade channel. These strong value activities - competitive advantages- are the green areas in the SWAT analysis. The red areas need to be taken care of by the trade partner or need to be improved by the exporter Each market mode focuses one or two of the specific value activities (TPLMS) and shows, which is the best way to escape the downward price spiral and enter the high road to global markets.

3. From audit to business

4. COST Market Mode - who does what ? SUPPORT LOGISTICS MARKETING PRODUCTION TECHNOLOGY SELLERBUYER CONSUMER CUSTOMER VALUE

5. VALUE TECHNOLOGY PRODUCTION MARKETING PATENT BRAND Market Mode – how to upgrade ?

6. Market entry mode FRESH PRODUCE Outgrowing Contract farming Variety Brand/variety GARMENTS CMT/Maquila FOB Sourcing Brand/design INDUSTRIAL Jobbing Subcontracting Licensing Private label Brand SERVICES BPO/call centre KPO/ITO/Eng IP/own content Brand TOURISM Travel agency Tour handler Tour op/package Brand consolidator PRE-HARVEST +++ ++ +++ DESIGN + ++ +++ TECHNOLOGY + ++ - +++ ++ TECHNOLOGY + ++ +++ ++ PACKAGING - + +++ POST-HARVEST ++ +++ PRODUCTION+++ +++ PRODUCTION +++ ++ +++ ++ EXECUTION +++ ++ EXECUTION ++ +++ + LOGISTICS + ++ + +++ LOGISTICS + ++ LOGISTICS + ++ + ++ MANAGEMENT ++ +++ + ++ MANAGEMENT + ++ +++ ++ MARKETING - ++ +++ MARKETING - + +++ MARKETING - +++ + +++ MARKETING+ + +++ MARKETING ++ - + +++ SUPPORT+ ++ +++ SUPPORT + ++ ++ +++ SUPPORT - + +++ +++ ++ SUPPORT+++ - + SUPPORT + ++ +++ ++

7. T P L M S FRESH PRODUCTS GARMENTS APPAREL MANUFACTURED PRODUCTS SERVICES ITO/BPO/KPO Contract manufacturing CTCCMTP, Maquila JOBBING, TOLL CONVERSION, CKD ASSEMBLY BUSINESS PROCESS OUTSOURCING Sub- contracting OUTGROWINGFOB SUBCONTRACTING CUSTOM MNF. SKD, EMS KNOWLEDGE PROCESS OUTSOURCING License manufacturing GROWING LICENSE MANUFACTURING, BOX EMS BRAND Private label manufacturing SOURCING PRIVATE LABEL MNF. ODM IP/OWN CONTENT Own IP/brand UNIQUE VARIETY OWN BRAND OWN DESIGN OWN BRAND OWN TECHNOLOGY OWN BRAND IP/OWN CONTENT OWN BRAND Market Modes We distinguish five general types of business models/ market entry modes: each model has a different amount and nature of value addition.

8. SELLERBUYER CONSUMER COST 1. Contract manufacturing SUPPORT LOGISTICS MARKETING PRODUCTION TECHNOLOGY Seller concentrates on production or execution and leaves technology, design, marketing to buyer -low value adding. Typical trade partners are A-brands, companies with simple after sales requirements

9. COST TECHNOLOGY PRODUCTION 1.1. CMTP/maquila CMT CONSUMER TECHNOLOGY LOGISTICS MARKETING SUPPORT

10. 1.2. BPO/call centre CALL CENTRE CONSUMER COST SUPPORT LOGISTICS MARKETING PRODUCTION TECHNOLOGY HSBC

11. SELLERBUYER CONSUMER COST 2. Sub-contracting SUPPORT MARKETING TECHNOLOGY PRODUCTION LOGISTICS TECHNOLOGY Seller produces under specifications of buyer,sources all materials. Buyer concentates on logistics, marketing and after sales. Typical trade partners are large retail chains, T1/ OEM’s, firms with more complex after sales requirements.

12. SPRAYER LTD.“CHANEL” CONSUMER COST 2.1. Cosmetics - sprayers SUPPORT MARKETING TECHNOLOGY LOGISTICS TECHNOLOGY PRODUCTION

13. Tier 2 –piston manufacturer Tier 1 – engine manufacturer OEM – truck manufacturer 2.1. Automotive – T2

14. ENGINEERING FIRMKEMA CONSUMER COST 2.3. Engineering services SUPPORT MARKETING TECHNOLOGY PRODUCTION LOGISTICS TECHNOLOGY

15. SELLERLEVIS CONSUMER COST 2.4. “FOB” SUPPORT MARKETING TECHNOLOGY PRODUCTION LOGISTICS TECHNOLOGY

16. COST 3. License manufacturing SUPPORT LOGISTICS MARKETING PRODUCTION TECHNOLOGY SELLERBUYER CONSUMER Seller has captive (regional) markets, but lacks the technology or design capacity. Sources technology from third parties and concentrates on marketing. Typical alliances are with enineering firms, design studios, laboratories

17. “License and buy back” : Buyer provides the design, drafts, formulation of product, often trough a design studio Buyer provides sometimes a “secret component” Seller takes care of production Other modes : Seller takes care of marketing, sometimes under own label, sometimes under licensor’s brand Seller takes care of outgoing logistics Suitable for regional markets, beware of marketing restrictions from licensor 3. License manufacturing – 2 options

18. LICENSOR LICENSEE FREE MARKETS BLOCKED MARKETS 3. License manufacturing

19. COST 3.1. Food processing SUPPORT MARKETING TECHNOLOGY BOTTLERCOCA COLA CONSUMER LOGISTICS PRODUCTION

20. COST 4. Private label manufacturing SUPPORT LOGISTICS MARKETING PRODUCTION TECHNOLOGY LOGISTICS SELLERBUYER CONSUMER Seller has a unique technology or design, production or execution facilities, but lacks/does not want to get involved in marketing after sales. Typical trade partners are retail stores, B-brands, OEM’s.

21. COST 4.1. Automotive – car assembly SUPPORT LOGISTICS MARKETING PRODUCTION TECHNOLOGY LOGISTICS MAGNA STEYRCHRYSLER CONSUMER

22. COST 4.2. Oil industry SUPPORT LOGISTICS MARKETING PRODUCTION TECHNOLOGY LOGISTICS SHELL CONSUMER

23. COST SUPPORT LOGISTICS MARKETING PRODUCTION TECHNOLOGY LOGISTICS SELLERMORNING FRESH CONSUMER 4.4. Food processing

24. A -BRAND 4.4. The supermarket shelf HOUSE BRAND FIGHTING BRAND

25. COST 4.4. Accessories – sourcing SUPPORT LOGISTICS MARKETING PRODUCTION TECHNOLOGY LOGISTICS UMBRALLA MNF.VODAFONE CONSUMER

26. COST 5. Own IP/brand SUPPORT MARKETING PRODUCTION TECHNOLOGY LOGISTICS SELLERBUYER CONSUMER Seller has own technology, content or design, markets its products or service under own brand through trade channels or on the web. Typical trade partners are distributors, retail, publishers-or direct sales

27. COST 5.1. Games SUPPORT MARKETING PRODUCTION TECHNOLOGY LOGISTICS APPLE CONSUMER

28. COST 5.2. Garments - brand SUPPORT MARKETING PRODUCTION TECHNOLOGY LOGISTICS CLEVER MODA S.A.RETAIL CONSUMER

29. COST 5.3. Food processing - brand SUPPORT MARKETING PRODUCTION TECHNOLOGY LOGISTICS BUYER CONSUMER

30. TECHNOLOGY - Qualified engineers, designers, equipment, research, product development, design, laboratory, +++++++ PRODUCTION - Manpower, machines, buildings, processes, internal routing +++ +++++ LOGISTICS - Logistical infrastructure, sourcing, materials managements, storage capacity, transport equipment (own or outsourced) +++ + MARKETING - Marketing/sales management, promotional activities, customer retention, relation mgmt. ++++++ SUPPORT - Personalized service, pre- and after sales service, maintenance, helpdesks, product information, application engineering. +++++++ Required amount/nature of value addition CONTRACT MANUFACTURING SUB CONTRACTING LICENSIE MANUFACTURING PRIVATE LABEL MANUFACTURING OWN IP BRAND