1. INTERNATIONAL STRATEGY SMALL AND MEDIUM COMPANY
Lecture 7
INTERNATIONAL STRATEGY
SMALL AND MEDIUM COMPANY

2. Marketing strategies Exporting; International niche marketing;
Ecommerce;
Participation in a international supply chain.

3. Difference Exporting Niche marketing Strategy Selling domestic product
Customer needs
Objective
To amortize
To add value
Segmentation
Country
Customer benefits
Pricing
Cost based
Market based
Distribution
Using agents
Managing supply chain.
Customer relationship
Working with intermediaries
Building multiple level relationship

4. International niche marketing
Segment must be too small or specialized.
Product or services must be highly differentiated.

5. International niche marketing
Have a good information about the segments needs.
Clear understanding of the segmentation criteria

6. Barriers to internationalization.
Too much red tape.
Transportation difficulties.
Lack of personal.
Language barriers.
Limited information.

7. Barriers to internationalization.
Fear that their products are not marketable.
Believe the domestic market offer best potential.

8. The Mckinsey 7S Framework
Hardware
Strategy, structure and systems.
Standardization.
Software
Style, staff, skills and shared value.
Adaptation.

9. Marketing strategic First step: Segmentation:
Target: segments which appear to be most attractive.
Positioning: Firms needs to position its products or services in a way that will distinguish them from others international competitors.

10. Competitive strategies
Cost leadership:
Requires the firm to establish a lower cost base than international competitors.
Countries with lower labor cost.

11. Competitive strategies
Differentiation
Customers think are important and significant improvement over competitive offers.
Requires systematic incremental innovation to continually add customers value.

12. Competitive strategies
Focus
The firm concentrates on one or more narrow segments thus built relationship with the customer is strong.
This strategy require high level of customer and technical service support.

13. The secret of high growth
Slower growth firms typically focus upon the competition by benchmarking and seeking to meet the customers.
By offering a little more value for a little less cost.

14. The secret of high growth
High growth firms leave the competitors to fight amongst themselves.
Seek to offer customers a quantum leap value.
Lead to a step change in value they will be perceived as such by customers all round the world.
What is customer value?

15. Levels of internationalization
The passive exporter
Tends to lack any international focus and perceives export markets as having a high hassle factor.

16. Levels of internationalization
The reactive exporter
See export market as secondary to the domestic.
But once they have done business with a foreign customer they will follow up for repeat orders.
Low invest in attracting export orders.
Basic knowledge of their markets.
Still undecided about their future role as an exporter.

17. Levels of internationalization
The experimental exporter
Is beginning to develop a commitment to exporting.
Regular contact with key accounts.
Although they would prefer not to, such firms are prepared to make product adaptations to suit overseas customers needs and may have appointed dedicated export staff to look after this part of the business.

18. Levels of internationalization
The proactive exporter
Focus on export markets.
Devotes substantial amounts of time and resources to entering and developing new markets.
Exporting may account for up to 50 per cent of turnover.

19. Levels of internationalization
The well-established exporter
Exporting is integral to the business.
See the domestic market as just another market.
The majority of the turnover is generated through international trade.
Significant amounts of resources are spent on this activity.

20. Country selection
Fast growing markets appear to offer the most attractive opportunities.
It is important the need to be an early in the market.
To avoid high levels of competition.

21. Networking
Many times the selection of the market is not made on the relative attractiveness of one country.
The country selection tend to be a result of a network approach.
Reduction of the risk of entering unknown markets by working with companies they know.

22. Niche marketing of domestically delivered services
In the past this category has been dominated by travel industry, hotels or tour operators.
With increased international travel the role of small and business companies is becoming increasingly important.
Customer demand a wider ranger of services as education, specialized training, medical treatment, sports, etc.
The strategy is the same as for companies to sell to foreign countries.
They must meet the requirements to international markets.
Consequently issues of standardization or adaptation of the marketing mix elements are equally important.

23. Reasons for failure Failure to scan the international environment.
Overdependence on one product.
Powerful competitor copy the idea.
Failure to respond to worldwide changes.
Failure to financial plan.
Failure to manage and resources both market and operation expansion.
Failure to plan for fluctuation in currency values.