EKLYA - 3 - Evolutions du Marché au Niveau Mondial...

Laurent Dorey – [email protected]

The Internationalization Processes

www.add-wise.com -> EKLYA - Evolutions Marchés

M1 - MDAI - MA1 - Evolutions du Marché au Niveau Mondial

Laurent Dorey

November, 25th, 2019





Program:EKLYA-M1


Internationalization and Network Development

Internationalization of High Growth Startups

Future of Strategic Human Resource Management

Workshop - Practical Case

Internationalization of SMEs Through Clusters

Laurent Dorey – [email protected] -> EKLYA - Evolutions Marchés






Recap

There are 3 essential characteristics of internationalization:

Internationalization is universal

Internationalization is heterogeneous

Internationalization is sequential





Recap - Internationalization is Universal

In terms of geographic zones (i.e. country of origin and host country)

In terms of firm size (i.e. small firms and MNCs)

However:

More and more SMBs are entering the international arena thanks to new tech-

nologies

The export rate (export sales/domestic sales) or degree of internationalization

is considered independent of firm size, so international commitment is as

strong for small international firms as for large international firms





Recap - Internationalization is Heterogeneous

In terms of entry modes

In terms of internationalization vectors

Country/market

Market segments

Products/services

In terms of business functions

International sales (i.e. exporting, selling abroad)

International sourcing/procurement (i.e. buying abroad)

International production (i.e. manufacturing abroad)





Recap - Internationalization is Sequential

It is sequential in time

Learning process (i.e. Scandinavian Stages Model of Internationalization)

It is sequential in space

Concentric expansion

Distance





Factors of Globalisation

Knowledge

Theories

The best one/combination

Partners

MNC

Agent

Subsidiary





Managerial Outlooks

Entrepreneurial outlook

Calculate risks

Be proactive

Flexibility as asset





Agent’s Role

Provide

Information, structure/infrastructure

Facilitate

Communication, interpretation, understanding

Enhance

Learning

Help

Building-up image and reputation





Business Network

The bridge to foreign markets

MNCs as Integrator

MNCs as distributor

• Network

• Logistics

• Combination





The Uppsala Model of Internationalization

The firm is a learning organization

Internationalization is a series of steps in a learning process (i.e. learning about

international environment and activities)

The greater a firm’s international experience, the greater its commitment to

foreign markets

Knowledge and experience are directly related to the firm’s growing commitment

Internationalization is not spontaneous, it is the gradual result of successive deci-

sions (i.e. evolutionary development of the firm)






Behavioral approach

Stage pattern

Test markets

Minimization of risk






Concentric Expansion

Hot countries

Cold countries





Revised Uppsala Internationalization Model

Multiple Company AnalysisSingle Company Analysis

The Network and

Relationships within itCompany Usually a Producer

Nodes and Threads,

Actors/Activities/ResourcesStages, Decision Making






Knowledge

Interaction

Knowledge sharing

Individual & organizational learning

Outperforming competition through knowledge acquisition/use

Trust/Cooperation

Technical

Legal

Economic

Personal/Business ties






Commitment

Strengthening or weakening the network

Opportunity development

Domestic and foreign networks





The Network determines

Geographical market/s

Size of investment

Organizational changes

Access to resources





Basic Mechanism of Internationalization





Born Globals

Strategic moves (from inception)

Technology driven (mostly)

25-50% foreign sales within 3 years





Born Globals vs Process Model

Market

Experience

Extend of internationalization

Strategy

Information

Time to Internationalize

Process Model

Home

Yes

Stepwise penetration

Internationalization is not the

core

Not so important

Slow, time is not important

Born Global Firm

International

No

Many markets

Full internationalization

communications to reach market

Quick (0-3 years)





Internationalization Theories - Global Marketing





Why do SMEs Internationalize?

New markets

New suppliers

New knowledge

New money

Being internationally active strongly relates to higher turnover growth

SMEs that are internationally active report higher employment growth

The relationship between internationalisation and innovation is strong





SMES’ Main Barriers to Internationalisation





How to Define Clusters?

Cluster aim to build knowledge bridges between companies and knowledge institu-

tion and to create innovation and growth within a group of companies with shared

interests

Triple helix organisation, i.e. both companies, knowledge institutions and pu-

blic partners/civil society take an active part

Formally established organisation of the cluster have the resources to offer services

and activities to the members

The aim is a long-term, sustainable effort

Minimum number of committed participants from private compa-

nies





The Importance of Clusters

Companies in clusters are:

More productive than companies not involved in clusters

More innovative than companies not involved in clusters

More international than the other companies





Why do Clusters Internationalize?

A global starting point in the companies

Knowledge and research is international

Internationalisation is matching the needs of the cluster

Innovative barriers for the cluster members

International branding





What is Internationalization Through Clusters?

It’s more than export!

Innovation projects

SMEs into research

Matchmaking

Innovation Missions

Talent attraction





What do SMEs Gain From Clusters?

Access to market information/benchmarking/inspiration

General networking and access to new international contacts/cooperation partners

Exposure to new opportunities/new partners in other sectors or application fields

Development of stronger international visibility

Access to new markets

Access to particular knowledge source (i.e. specific expertise)

Access to external infrastructure (e.g. labs, demonstration, testing facilities)

Facilitation/initiation of collaborative research and/or development processes





What do SMEs Gain From Clusters?

Better understanding of new markets/players

Knowledge sharing and inspiration, identification of new opportunities

Access to new partners and broadened networks

Strengthened presence/visibility in new markets

Initiation of longer-term research and innovation collaboration

Initiation of commercial contract or commercial transaction





What is Business Cluster?





Clusters: powerful engines of economic development in Europe - business planet





Why Do Startups Launch Internationally?

Sustain or accelerate growth

Geographic expansion as a key component for revenue growth

Diversify revenue

Allows the company to diversify revenues and risk, adding resilience to the

business

Sustain Competitive Advantage

Protects the company’s strategic position

Allows them to cement their technical lead in an increa-

singly competitive global market to create long term va-

lue





The Risks of Internationalizing - How the Best Deal with Them?

Managing a geographically dispersed organization

Culture, core values, systems, processes wrapped within a blanket of adaptabi-

lity

Different customer requirements and/or sales cycles

Recognising upfront what worked at home may not translate directly and may

require adapting accordingly





The Risks of Internationalizing - How the Best Deal with Them?

Cost and complexity of localising, selling, marketing and supporting a product for

different countries

Upfront investment & patience - commitment to being successful as important

as execution

Dependence on 3rd parties like resellers

Creating a win-win without compromising quality

Political and economic instability

Disaster recovery planning only gets you so far, the rest

is about being calm but decisive in a crisis





The 4 Principals for Launching Internationally

Operational readiness before launching 1st international market

1. Repeatable Sales Execution at Home

2. Graduated from selling to early adopters

3. Early International Customers

4. Understanding of local culture






Repeatable sales execution at home

Forecastable growth at home

Been through renewal cycles and have established customer success program-

mes

Clarity on pricing structure/model

Live marketing programs by channel that are forecastable from one quarter to

the next

More inbound leads than outbound leads, which translates into a working sales

machine

Stellar domestic growth – typically >100% p.a.






Graduated from selling to early adopters

Have ROI use cases from customers both at home and in the new country

• Good ROI use cases also enable more targeted marketing campaigns

Must be able to successfully win proof of concepts

Category leaders are winners - and the best way to lead a category is to create

it






Early international customers

Organic inbound leads from a new market

Successfully closed new customers in a new market, or cross-sales to an exis-

ting customer in a new country

Good understanding of how the sales cycle differs from home market

Deep understanding of the customer problem or “product/country fit”






Understanding of local culture

When entering a new country one need to be able to learn really fast

Sometimes the buying process is not different, but the reasons for buying are

Finding talent in a new country who are a cultural fit with your organisation is a

major challenge

• Large companies prefer to send their best employees to help establish a

new market

One need to feel like part of the local conversation and not an outsider

Hire for differences, not similarities:

• Needs to have as many cultures and backgrounds as possible





First Steps to Take in the Internationalization Process

Conduct due diligence and a thorough analysis on a new market

Invest into building market awareness and end customer demand from customers

before opening an office

It is imperative to build reference-able “local” customers rapidly





First Steps to Take in the Internationalization Process

Ensure to use the same effective marketing campaigns and language used in the

early days of finding your first customers

In a new market, users are not (always) as well educated yet

Focus on getting the right procedures in place including legal entities and structures

as well as tax planning





Sound Commandments for Launching Internationally

Think like a global company from the start

Develop a product so it can be localised easily

Consider a range of go-to-market strategies before committing to one

See where the market pulls you, don’t force yourself into a new market unless ab-

solutely necessary

Test selling to a new market from your HQ before sending your first employee over

permanently





Sound Commandments for Launching Internationally

Send a founder or early senior executive to launch your first international office

Integrate your local hires into the company by training them in your company’s HQ

Allow each office to build their own culture while retaining the core pillars of the

company’s culture

Set organizational goals for the international business

Focus on one market at a time and record your learnings





What is the hardest part of expanding a business internationally?





Mega Trends in HRM

Demographic changes

Performance management

Technological changes

Talent management

CSR & sustainability





Demographic Change in Age Structure

Healthy, productive, motivated through

Ergonomics

Workplace design

Organizational structure

Assignment of tasks

Provision of adequate trainings and incentives

Decreasing technological affinity

Reduced interest in training





Change in Diversity

Substantial commitment of resources

Not viable for every company

Employment of diverse social groups

New management approaches

Establishment of supportive group norms and climate

Discrimination through stereotypes

Knowledge transfer

Distributed knowledge

Climate of mutual trust and respect

Organizational environment of learning and developing





Implications for Practice & Research

Increasingly practice age management

Analyze firm’s age structure

Determination of employee needs

Create adequate HRM processes

Integrate different dimensions of workforce diversity





Technological Changes

Changes

Organizational lifeTechnology





Diversity Management

Workshop - Practical Case



Explain and “theorize” the international development of the following companies

Internationalisation strategic steps/milestones?

Changes/adaptation to their business model?

Internationalisation of their Workforce/Management?

…

Work 3 by 3, then Board presentation

UberBlabla car

Carrefour

Beko

Huawei

SamsungLogitech

Spotify

Decathlon

Valeo





Designing For Global Markets



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EKLYA - 3 - Evolutions du Marché au Niveau Mondial...

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