Strategies for expansion of business on Global level

Assignment Taken

Develop an International Market expansion plan,

Case Understanding

The case revolves around the Ramalingan Foods which is a fast food restaurant in South Bombay. Established in the year 1965, founded by Ramaligam Venkatesh, which was famous for its south Indian food and filter coffee. In the year 1975, there was turn and twist in the country which lead Ramalingam foods to find new ways to sustain the business. They started with selling batters of Dosa-idli and packed chutneys. This new innovation lead to a new business idea and future growth with good margins. After Mr Venkatesh Ramalingan, his son Mr Vijay Ramalingam took over the business with aim to expand more. He came up with powdered form of the batter which was successful in no time. With the success of the new product a risk on the authenticity raised. The company’s product was sold in different countries without the knowledge of the owner.

BCS Solution Summary

The first stage in developing an international business plan is to undertake a preliminary country analysis. Presented below are four separate sections to be completed for collection and analysis of market data and preparation of the plan: (1) Analysis: Cultural Environment; (2) Analysis: Economic; (3) Analysis: Market and Competitors; and (4) International Business Plan. CULTURAL ANALYSIS: The data obtained for this section provides vital information to guide development of the business plan and to support managers in understanding specific cultural dimensions of the country. ECONOMIC ANALSIS: This section generally includes two broad categories: general economic data that serve as a basis to evaluate the economic soundness of the country; and information on business infrastructure, including distribution channels and media. ' MARKET ANALYSIS At this stage of the international business plan, the analysis becomes more specific to the product and its relationship to the target market. THE PLAN The information gathered above is the basis for developing a plan for your product in the target market. Examine how to overcome the opportunities, problems, and threats identified to engender maximum sales and profits.

Solution

Companies choose international strategies based on their capabilities and skills as well as on the structure and nature of the industry in which they operate. Companies choose regional strategies if they feel that the regions have differences significant enough to justify such an approach. In contrast, companies elect a global strategy if they believe they have global products that can satisfy global consumer needs.

 

10 Principles to Consider When Marketing Your Brand Internationally:

1. People - Understanding Customer Behaviour in a Different World

The people you are marketing to and the product that you are marketing go hand in hand. However, we’re leading off with the people because if you don’t first and foremost understand who you are marketing to, you may end up trying to sell them a product they don’t want and probably will never buy. So, when it comes to taking a product or service abroad, you first have to see if there is even a market for your offering.

 

2. Product - Altering to Fit the Needs of Your New Market

If you notice that the current offering of your product now won’t play in the new market you want to enter then you can do one of two things:

A.) Decide not to sell in that market

B.) Change your offering to meet the local demand

 

3. Prices - Choosing a Premium or Economy Pricing Strategy

For the most part, if you already have a product or service that is successful in one area of the world, the price point you use won’t vary much in comparison to the competition in that area.

If you have a premium product, it’s likely premium elsewhere.

If you have a more affordable, economically-friendly product, it’ll be the same in your new market.

This is for the sake of consistency. It’s difficult to pull off being associated as a more expensive, premium product in one country, and the complete opposite in another. You may even risk bringing down your brand image as a result.

No harm, no foul.

 

4. Promotion - Choosing Strategies That Work in This New Environment

Figuring out the most effective methods for marketing your product or service abroad is not that much different than doing it domestically.

Even if you live where you’re promoting your product, you still have to do some additional research to find out where your target audience is and which mediums they frequent.

Take Brazil, China, Japan, Russia, Poland, South Korea, and Vietnam for example. In these countries — at least as of 2011 — Facebook is not the most popular social media site.

Instead, Twitter or Orkut and other regional platforms reign supreme.

Obviously, this doesn’t mean you shouldn’t be advertising on Facebook, but this information does suggest that perhaps focusing more effort on the leading site in those geographical locations — like Twitter, may be more effective. Especially if that’s where your demographic is hanging out.

Just like cities across the U.S. that vary in terms of which mediums are most effective, cities across the world tend to have their own unique preferences on channels and messaging.

But, as previously stated, it will take a lot of research to figure these things out.

Are certain markets susceptible to buy-one-get-one messages in retail stores? Is the country I’m planning on operating in using email? Does my new target market like coupons? Should I be advertising on television in this part of the world, or is YouTube be more appropriate?

These are just a few of the many questions you should ask yourself prior to starting any big marketing campaigns anywhere in the world.

 

5. Place - Finding the Sales Avenue That Your Consumers Use

Defining where you’ll be advertising and marketing your product or service is one thing. But finding the right place to actually sell your offering is another.

One of the bigger questions you should look to answer is whether or not you’ll be able to sell your product online. 

Did you know that there are many European countries where their people prefer to shop in person as opposed to online?

Depending on the country, the reason varies. Some people prefer to shop in person and see and touch a product. Or, they just have loyalty to that shop. Fifty-two percent of Montenegrins prefer to shop in person, the most of any European country. Romania (48%), Cyprus (40%), and Bulgaria (39%) are the next three in the list.

Meanwhile, the U.S, U.K, Sweden, and France are on the other side of that spectrum, as they are the top 4 countries in terms of average e-commerce revenue per online shopper. 

 

6. Packaging - Finding the Right Look

The way you package your product or service may vary a lot from country to country.

When you determine how to package your offering, colour is an important choice. One reason for this is that different areas of the world associate specific meanings to certain colours.

For example, in Eastern and Asian cultures, red is a colour that is synonymous with happiness, joy, and celebration.

But in the Middle East, red is considered a warning and brings forth feelings of danger. Some also consider it to be the colour of evil.

As you can see, doing research on the psychological effects of colour within each culture you’re operating in is extremely important for choosing the right packaging colours for your product.

In addition to the design, the copy on the packaging is also important. As we saw earlier, with KFC and Coca-Cola, translation errors are fairly common.

When working on your packaging and label design, these key questions can help:

Are international brand names important to promote and distinguish a product? Are the colours used on labels and packages offensive or attractive to foreign buyer?

Can labels and instructions be produced in official or customary languages if required by law or practice?

Does information on product content and country of origin have to be provided?

Are weights and measures stated in the local unit?

Does each item have to be labeled individually? What is the language to be used on the label?

Are local tastes and knowledge considered?

 

7. Positioning - Determining Which Messages Will Resonate with The Market

Positioning is absolutely critical when entering a new market.

If your initial positioning fails, an attempt to reposition your product can be costly and is not guaranteed to be successful. This is why it’s important to get it right the first time.

A significant part of your positioning will be evident in the messages you relay in marketing campaigns. The messaging should be derived from your unique value proposition (UVP), which should be made up of the following:

Relevancy — how your product solves customers’ problems or improve their lives

Value — what are the specific benefits

Differentiation — why your ideal customers should choose your product over the competition. 

 

8. Physical Evidence - Getting the Ambiance and Mood Right

If you’re looking to enter a new market abroad with a service, listen up because this one is especially for you.

Because services are — for the most part — considered intangible when it comes to marketing. So, if there is no product that can be altered or changed to fit the needs and wants of a new market, then you have to pay attention to the physical evidence in the setting where people will receive your service.

The physical evidence can be broken into three separate areas.

Physical Environment

The physical environment is the physical space that surrounds the consumer during the service or experience. So, if you’re selling food, then the restaurant is the physical environment.

Ambiance

You can look at the ambiance as a subsidiary of the physical environment, it is about the mood and feeling inside the physical space. Colours, music, and lighting are little details that can make a big difference when it comes to how your service is perceived by your consumers.

Spatial Layout

To further illustrate the significance of the actual layout of the space where your service is offered, let’s consider a karaoke bar. In the U.S, karaoke bars typically set up the karaoke machine in an open space, where anyone can see the person performing.

However, in Japan, karaoke bars are much different — the majority of them feature private rooms (karaoke bars) for groups of people to rent for a specific amount of time. So, as opposed to belting out the lyrics to “I Feel Like a Woman” in public, people in Japan prefer to be in a more private space for such occasions.

Once again, the Best Buy example fits this bill as well, where their consumers in Europe found their large stores overwhelming because of how big they were.

 

9. Local Teams - Don’t Overlook Them

As this Harvard Business Review article written by Nataly Kelly and titled “The Most Common Mistakes Companies Make with Global Marketing” points out, one of the top global marketing mistakes a company will make is not listening to their local teams.

“One of the most disappointing mistakes that I’ve seen companies make is that they hire highly competent, intelligent local people to serve their overseas markets, but then fail to consider their input when making strategic decisions,” says Kelly in the article.

As a global consultant, Kelly has faced many marketing executives who just don’t seem to understand the importance of the local teams they established. When asked why they aren’t succeeding in a certain country, she often answers with, “Ask your local teams.”

Not only do you have to make sure local teams are incorporated into your global marketing strategy, but you should also use them as a helpful resource.

“Leverage your existing relationships, and make sure to give their feedback extra weight. They are by far your most credible advisors,” Kelly finishes.

 

10. Understanding - Making a Positive Influence on Your New Community

At the basis of all of these principles, there is a common theme of understanding your consumers.

You should constantly be asking what are their needs, wants, pain points, and desires. 

What is important to them? What do they truly care about? What are they missing in their lives? What can you offer to them that no one else can?

Answering all of these questions and incorporating them into your global marketing strategy will help you find success with sales.

 

However, focusing solely on short-term profits is not a sustainable, long-term strategy.

When you’re entering a new market, especially in a new country, ensuring that the environment you're operating in will be prosperous long-term is essential.

Simply put, brands that utilize the triple bottom line — people, planet, and profit — tend to have more success as a global company.

Kerry Sullivan, president of the Bank of American Charitable Foundation, explains the importance of ensuring that the communities around you share in your success.

“We’re looking at long-term solutions, not just Band-Aids,” Sullivan says. “If we can help create strong, sustainable communities, it will ultimately strengthen our business too.”

 

Bank of America works towards strengthening low-income communities through numerous non-profit partnerships, as well as improving financial literacy skills, which in turn leads to a healthier business climate.

Giving back to the community creates a more sustainable community for your business and the people within it to thrive.

 

 

11. Internal analysis (company)

In order to make the most of your company’s strengths and improve your weaknesses, the internationalisation plan begins with an analysis of the competitive capacities of the company in relation to the foreign markets in order to achieve profit maximisation. Some strengths which make international success possible are:

Achieve sufficient production capacity or surplus in order to satisfy an increase of demand in foreign commercial activities. Availability of a suitable level of technology and quality which allows you to take on the emerging market successfully. Availability of the necessary flexibility to adapt the product to the needs of certain foreign markets.

The most common weaknesses of exporting companies are:

1. Lack of resources to finance the current capital of the international operations
2. Lack of knowledge and information about foreign market resources and the way to create an international commercial network
3. Incapability to attain the suitable human resources for the export tasks – in terms of experience, knowledge of foreign trade and languages.

 

12. External Analysis (industry)

The external analysis leads to an identification of the economic, policies and social trends, which may affect the international evolution of the industry where the company plans to develop its activity.

Generally, companies do not have the capacity to influence in these trends; however one should know what they consist of:

Negative trend: constitutes a threat; something companies have to confront.

Positive trend: constitutes an opportunity to make the most of.

Below are some examples:

Free trade: through the World Trade Organisation (WTO) and other international agreements the barriers to trade are been dismantled. Even though this creates a potential opportunity in increasing the accessibility to international markets for the exporter, this could also be a threat for other companies which are not capable to maintain a position in the domestic market and are increasingly more open to competition from foreign companies.

Internet use: this is another factor that could affect companies in many different ways. In some cases, companies are using information technology to improve their operations in foreign markets. For example seeking importers through foreign trade searches, making offers online, or incorporating their products to marketplaces.

Consolidation of emerging countries (South-East Asia, Latin-America, and North Africa): the penetration of products from these countries in the developed countries increases the level of competitiveness. Equally, the level of prosperity increases in these emerging countries, and so they are now priority target markets, especially in industrial and consumption products.

 

13. International SWOT Analysis

 

The SWOT analysis is a very useful tool to identify the key factors in the foreign and domestic environment. It is vital for the company in indicating exactly what to take into account to design their international strategy. This is distinguished through Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T).

1. The threats are factors of the international environment that are out of control. They can affect the accomplishment of the objectives of the Plan.
2. The opportunities are factors of the international environment that favor the achievement of the company’s objectives.
3. The strengths are internal factors of the company which will support the success of internationalization.
4. The weaknesses are also internal factors that put in danger the success of the plan, and therefore should be modified as soon as possible.

 

14. Preliminary Assessment

Once the principal strengths, weaknesses, opportunities, and threats are identified you must get some conclusions and at the same time describe actions you wish to proceed successfully within the foreign markets. These conclusions are double-sided: for business strategy and resources.

Business strategy: the company should consider questions for example:

•           Is it capable in completing the legal normative of the most demanding countries?

•           Does it have the production volume to supply the large clients?

•           Can it adapt the product and service to the needs of the different domestic markets?

•           Can it sell its products internationally through Internet?

Resources: the conclusions about the available resources should contain questions such as:

•           Is it necessary to count on specialized personnel to sell abroad?

•           Does the company have resources to finance the buying of primary materials, machines, etc., necessary for internationalization?

•           Is it necessary to promote the best brand/company image to sell abroad?

•           Is the owner motivated to make the most of internationalization?

Conclusion

Requirements depend on foreign market research, risk assessment, and a selected international business strategy. Product Product /Service Adaptation Requirements; Production Process Modification Requirements; Compliance Requirements; Packaging and Labeling Requirements; Translation Requirements. Price Pricing Strategy; Currency Requirements; Tax and Customs Duties Considerations. Promotion Target Audience; Marketing Channel and Activities. Place Target Countries; Shipping Mode; Shipping Requirements. Payment Payment Method; Foreign Currencies Fluctuation Risk Hedging; Cash Flow Instruments to Make Sure It Is Positive. Personnel Personnel Plan; Compensation Requirements; Motivation System; Training Requirements; Hiring Process and Job Requirements. Planning International Business Plan. Action Plan; Short-term and Long-term Marketing Plan; Promotional and Sales Materials; Production Plan; Technology Support. Positioning Brand Values; PR and Communication Plans Paperwork Government Registration as Importer or Exporter in Your Country; Government Registration in the Countries of Destination, If Required; Requirements to International Trade Contract; Customs and Transport Documents Requirements. Practices Local Business Practices and Professional Ethics; Business Practices and Culture of Your Home Country. Partnerships Requirements to Foreign Partners and/or Distributors; Industrial, Government and International Institutions Providing Assistance in International Business; Financial Institutions in Your Home Country and Target Countries Providing Assistance in International Business; Private Institutions in Your Home Country and Target Countries Providing Assistance in International Business. Policies Human Resources Policy; Manufacturing Policy; Environmental Policy; Technology Policy; Distribution Policy; Warranty and After Sales Service Policy; Return Policy; Privacy Policy. Protection Trademark; Copyright; Patent or Trade Secret.

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