Export planning
Willem Klijnstra
May 2017
Education & Work Experience
• University of St Andrews (UK)
• University of Maryland (US)
• Countries I’ve lived & worked:
Willem Klijnstra
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University of Groningen: Economics
George Washington University: International Business Administration
First job: Philips (Lighting) Product / International Sales manager
Further career in New York, London, Netherlands for US, Dutch and French
multinationals. Last 15 years as Director
• 9 years ago, career change to University
Export Growth
http://en.wikipedia.org/wiki/List_of_countries_by_exports
Export Development 1980 – 2007 (Export value in $ x 1 bln)
Source: WTO
Drivers for export development
• Market development as a strategy (mature
market)
• Need to follow its customers
• Competition
• Opportunities
Export management
• Marketing, selling and distributing goods or
services from one country to another country
or countries.
• It includes importing and reselling goods and
services as well
The 10 steps of export planning
1. Company overview
2. Internal / external analysis
3. SWOT analysis / Strategy
4. Country selection
5. Supply chain set up
6. Market entry strategy
7. Marketing plan
8. Logistics / Organization
9. Financial plan
10. Milestones plan
Step 1: company overview
• Introduction: history, sales (product lines and markets), profit, ,
employees, organisation structure, main competitors
• Vision (“who we are, what we do and where are we headed”)
• Mission (“what is our current business and what things will we do the
coming 5 to 10 years”)
Step 2
Internal analysis
• Capabilities
Capabilities
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Size of the company
Company culture
Experience of the firm
Type of product / service
External analysis
• DESTEP analysis of current business
• Industry and competitive analysis
• Find trends
Internal – and External analysis
SWOT - analysis
Strengths
Internal
Examples
• specialist marketing expertise
• exclusive access to natural resources
• patent
• new, innovative product or service
• location of your business
• cost advantage through proprietary
know how
• quality processes and procedures
• strong brand or reputation
External
Opportunities
• developing market (for example China,
internet)
• mergers, joint ventures or strategic
alliances
• moving into new attractive market
segments
• a new international market
• Loosening of regulations
• removal of international trade barriers
• a market that is led by a weak
competitor
Weaknesses
• lack of marketing expertise
• undifferentiated product or service
(i.e. in relation to your competitors)
• location of your company
• competitors have superior access to
distribution channels
• poor quality of goods or services
• damaged reputation
Threats
• in new competitor in your own home
market
• price war
• competitor has a new, innovative
substitute product or service
• new regulations
• increased trade barriers
• a potential new taxation on your
product or service
Internal – and External analysiS
Example SWOT – analysis of PepsiCo
Strengths
Weaknesses
 Broad product line and outstanding reputation
 Global market leader in snack foods and non-carbonated
beverages (= power and knowledge)
 Intelligent Logistics network and strong existing
distribution channels
 Inability to leapfrog Coca Cola as being the most
famous beverage provider
 Reliant upon line extensions
 Reliant upon particular carbonated drinks
Opportunities
Threats
 Growing population
 Progress in technology
 less costly production processes
 Spread of liberalisation and democracy across countries
 Increasing health awareness
 Ongoing economic crisis
 Difficulties regarding financing of major projects
Source: R.Hüfler a.o., students HAN University
Step 3
• SWOT analysis and strategy
Step 4
• Country analysis and selection
Country Analysis
Example PUMA
Target: South America
12 countries
Middle and low level of economic
development
Unstable political and economical
situation in most countries
Lack of information about markets
Non-English domestic resources
Source: P.Kabanov a.o., students HAN University
Pre-Filter Selection
FACTORS:
Human development;
Environmental (disaster)
factors;
Import duties and sea delivery
cost
Football association presence
Pre-Filter Result
7,95
Guyana
5,95
EcuadorSuriname
Paraguay
Colombia
3,95
Peru
Venezuela
Brazil
Uruguay
Argentina Chile
1,95
Source: P.Kabanov a.o., students HAN University
Bolivia
Filter 2
Criteria
Weight
Argentina
Brazil
Chile
Potential market size (population)
0,2
21,930,540
99,327,027
9,786,759
Potential market size (value), billion
$
0,2
26.38
73.95
12.50
Inflation direction
0,1
moderate growth
stable
stable
Import duties
0,2
20%
35%
6%
National football team sponsor
0,1
Adidas
Nike
Brooks
Main competitors representativeness
0,2
6
10
6
Sum of weighted score
1,8
1,7
1,8
Rank by sum
2
1
2
Result
BEST
First country for expansion in South America is Brazil
Source: P.Kabanov a.o., students HAN University
Step 5
• Value chain and supply chain setup
Export Planning
Supply chain set up in existing markets
Source: R. Hüfler a.o., students HAN University
Example
Supply chain setup
H&M versus Zara
Step 6
• Market entry strategy
Step 7
• Marketing plan
Marketing Issues
Centrally important to Implementation
1. Market segmentation
2. Product positioning
Copyright © 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 7-33
Marketing Issues
Market Segmentation
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Subdividing of a market into distinct subsets of
customers according to needs and buying habits
Copyright © 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 7-34
Marketing Issues
Market Segmentation
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Key to matching supply & demand
Market-development, product-development,
market-penetration, and diversification strategies
Allows operating with limited resources
Enables small firms to compete successfully
Copyright © 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 7-35
Marketing Issues
Market Segmentation
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Directly affect marketing mix variables:
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Product
Place
Promotion
Price
Copyright © 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 7-36
Copyright © 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Marketing Issues
Product Positioning as Strategy Implementation
Tool
• Look for vacant niche
• Don’t serve 2 segments with same strategy
• Don’t position in the middle of the map
Copyright © 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 7-38
Step 8
Logistics & organization
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Incoterms: delivery and payment terms, export documents
Required organizational structure
Legal issues
Cultural issues
Key legal issues
• Export/Import documents, customs clearance
and taxation
• Contract between buyer and seller
• Consumer rights and duties
• Trade law and application of general terms of
sale
• Counterfeiting and grey market
Step 9
• Financial plan
Step 10
• Milestone plan
The international business of
snacks
or other local / regional delicacy
Willem Klijnstra, May2017
Goal of the project
• Development of an international business plan
for your start up company to sell local snacks
in a country of your choice, using the 10 steps
of export planning.
• Your promotion budget is € 25.000
The 10 steps of export planning
1. Company overview
2. Country choice
3. Internal / External analysis
4. SWOT analysis / Strategy
5. Supply chain set up
6. Market entry strategy
7. Marketing plan
8. Logistics / Organization
9. Financial plan
10. Milestones plan
1. Company overview
• Decide which local snack could be succesful in
another country
• Describe your new company: name, vision,
mission, structure, main activities:
2. Country analysis
• For your country of destination, describe the
major cultural dimensions in general
• What would be the possible effects on the
snack market
3. Internal /External analysis
Describe the local snack market
• the different varieties
• where are they sold
• who are buying them
• Culture of eating snacks
• when are they consumed: occasion, time of the day, etc)
• Freshly made versus prepacked
• Major suppliers
• Major competitors
• Etc.
4. SWOT analysis / strategy
• Develop a SWOT analysis and develop an
export strategy
5. Supply chain set up
• Will ready made products (including
packaging) be purchased in Croatia or will they
be prepared in the country of destination.
• Describe the process
6. Market entry strategy
Options:
• Selling directly to customers (e-commerce or
directly to retailers)
• Appointing an importer who will sell to retailers
• Start your own local production and sales
facilities
• Franchise: rent out equipment and recipes to
local bakeries / street vendors under your brand
• A combination of some of the above
7. Marketing plan
Develop your marketing plan as a result of your
chosen market entry plan
• Strategy
• Targeting and positioning
• Marketing mix
8. Logistics and organisation
What has to be organized ( in Croatia and / or
country of destination
9. Financial plan
• What would be your sales in the first 3 years
of operation: 2018, 2019 and 2020
• What would be the cost of your sold snacks
• What would be your marketing & sales cost
for each year.
• Any profit made?