Screening ,Selection and Choosing Entry Mode; (The case of European CIS countries)

Screening ,Selection and Choosing Entry Mode; (The case of European CIS countries)

Maliheh Ghadiri,

Habib Ramezanzadeh,

Kaveh Yazdifar,

Haleh Hamedifard,

Maliheh Ghadiri,

Habib Ramezanzadeh,

Kaveh Yazdifar,

Haleh Hamedifard,

Group 6Group 6

Key globalization decisionsKey globalization decisions

1. Decide whether to enter : Deciding on going international market or not

2. Decide which markets to enter Screening country markets Selecting country markets

3. Decide how to enter Choice of entry mood

4. Deciding entry timing5. Plan marketing programs

Deciding on marketing plan

1. Decide whether to enter : Deciding on going international market or not

2. Decide which markets to enter Screening country markets Selecting country markets

3. Decide how to enter Choice of entry mood

4. Deciding entry timing5. Plan marketing programs

Deciding on marketing plan

IM Strategy Process& Our Focus

IM Strategy Process& Our Focus

Understand the environmental influences on a firm’s international markets

Segment international markets, identify &analyse opportunities

Develop appropriate international marketingstrategies, planning & processes

Decide marketing entry strategies

Build added value through effectivemarketing mix strategies

Feedback & reassesscontinually

1-Why expand internationally?1-Why expand internationally?

limited domestic market opportunities enjoying economies of scale/global

volumes leverage the competencies of the firm stake holder's expectations

limited domestic market opportunities enjoying economies of scale/global

volumes leverage the competencies of the firm stake holder's expectations

2-1-Screening country markets2-1-Screening country markets

Assess the External Environment of each country

PEST Analysis(political, economical, Social, Technological)

Assess the Firm’s Competences & Competitive Power (Internal analysis)

Market knowledge, Porter’s 4P (product, price, place, promotion)

Assess the External Environment of each country

PEST Analysis(political, economical, Social, Technological)

Assess the Firm’s Competences & Competitive Power (Internal analysis)

Market knowledge, Porter’s 4P (product, price, place, promotion)

Selecting country marketsSelecting country markets

External EnvironmentExternal Environment

Competitive PositionCompetitive Position

2-2-Selecting country markets2-2-Selecting country markets

Market EnvironmentCompetitive

Position

Russia 4.67 3.95

Ukraine 3.37 2.9

Georgia 2.63 2.73

Belarus 3.61 2.61

Moldova 1.73 2.3

Market Attractiveness Matrix

5 1

1

5

Attractiveness Results

Country Attractiveness

ch4_6

5

1 15 1.73.3

1.7

3.3Russia

Ukraine

Georgia

Belarus

Moldova

Market Segmentation

Country Markets

Select

Prioritize

AnalyzeApproximately 210 countries

European CIS countries

3.Entry Mode Options

• Exporting

• Contractual Agreements

• Foreign Direct Investments

Internationalization Process

?

Entry Modes: A Decision Framework

How highare Transport costs?

Can Know-howbe licensed

Is tightcontrolrequired

Can know-howbe protected bylicensing contract

Export

InvestmentEntry or JV

Then License

Low

High No

yes

yes

Yes

No

The Internationalization Stages

Internationalization StagesStage 1 – Indirect exporting, licensingStage 2 – Direct exporter, via independent distributorStage 3 – Establishing foreign sales subsidiaryStage 4 – Local assemblyStage 5 – Foreign production

Marketing and direct sale of domestically-produced goods in another country.Does not require that the goods be produced in the target country.No investment in foreign production facilities is required.Low risk of investment

Why Exporting?

Modes of Entry

Cost

Risk

Exporting

Licensing

Franchising

Joint Venture

Wholly OwnedSubsidiary

Low High

High

Acquisition

In general, there is a cost/control tradeoff in choosingwhich mode of entry to use.

4.Deciding entry timing

Waterfall StrategyThe firm gradually moves into overseas markets

Export Expansion Strategies

Sprinkler Strategy

The firm tries to enter several country markets simultaneously or within a limited period of time

The Waterfall Gradual Expansion

Home Country

Other country markets

Home Country

Other country markets

The Sprinkler Simultaneous Expansion

Step 1 Step 2

Identify a potential market

Match needs to abilities

Step 3

Initiatemeetings

Developing an Export Strategy

Step 4

Commit resources

ReferencesReferences

Course Handouts & Articles www.CIA.gov www.en.wikipedia.org

Course Handouts & Articles www.CIA.gov www.en.wikipedia.org