Export Planning E-Book

Joris Leeman

• Herausgeber: Books on Demand
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 449

Veröffentlichungsjahr: 2018

Beschreibung

When a company initiates export development and internationalisation, it is essential to follow a systematic strategy formulation and decision-making process. Export Planning (2nd edition) provides a methodology to plan and achieve globalisation. This process of export planning consists of four phases: export policy, export audit, export plan, and export roll-out. Export Planning describes these 4 phases, and provides a 10-step guide for the construction of an international marketing plan. Export Planning will enable readers to: 1. systematically select and plan entries into new international markets; 2. enhance the chances of success through an integrated review of analysis and strategy by means of marketing, logistics, organization and finance; 3. assemble a sound line of reasoning from strategy to implementation. Export Planning is a practical book. It describes export and international marketing at a strategic, tactical and operational level, and combines theoretic models with relevant practical experience. New to this 2nd edition is an additional chapter on the implementation of the export transaction. This book is intended for bachelor and graduate students at business schools and universities. This book is also useful for anyone who wants to know more about export planning, international marketing and international market development.

Leseprobe

For

Mai-Lan

Table of contents

Foreword

Acknowledgments

About the author

Preface

Export Planning Part I

1 Introduction export planning

1.1 Internationalisation of the organisation

1.2 Country position and market attractiveness

1.3 Export policy

1.4 Export planning

1.5 10-step export plan structure

Summary

Case

Terms

2 Internal and external analysis

2.1 Export policy

2.2 Company overview

2.3 Internal analysis

2.4 External analysis

2.5 SWOT

Summary

Case

Terms

3 Business strategy and internationalisation

3.1 Business strategy and export policy

3.2 Competitive environment

3.3 Growth strategy

3.4 Product life cycle and product portfolio management

3.5 Competitive strategy and value proposition

Summary

Case

Terms

Part I - 1st review gate decision

Checklist I

Export Planning Part II

4 Country analysis and selection

4.1 Country analysis approach

4.2 Country selection: pre-filter

4.3 Country selection: filter 1

4.4 Country selection: filter 2

4.5 Country selection: proposal and choice

Summary

Case

Terms

5 Value chain and supply chain setup

5.1 Describe your supply chain

5.2 Value chain analysis

5.3 Choose the right business process model

5.4 Identify key processes

5.5 Supply chain setup

Summary

Case

Terms

6 Export market strategy and entry options

6.1 Describe your export market strategy

6.2 Export market entry options

6.3 Market entry risk analysis

6.4 Compare market entry options and choice of market entry

Summary

Case

Terms

Part II - 2nd review gate decision

Checklist II

Export Planning Part III

7 Marketing mix and competitive positioning

7.1 Analyse your international strategy of market development

7.2 Consumer needs and consumer brand positioning

7.3 Assortment planning and competitive positioning

7.4 Plan the marketing mix setup

7.5 Price setup

Summary

Case

Terms

8 Logistics and organisation

8.1 Develop the logistics structure and distribution setup

8.2 Create the necessary organisation structure setup

8.3 Identify cultural issues and resource requirements

Summary

Case

Terms

9 Financial plan and legal issues

9.1 Develop the sales plan

9.2 Put together the profit & loss and cash flow statement

9.3 Execute an investment analysis

9.4 Identify relevant legal issues

Summary

Case

Terms

Part III - 3d review gate decision

Checklist III

Export Planning Part IV

10 Milestones and implementation

10.1 Create a milestones list

10.2 Identify critical success factors and have a fallback plan

10.3 Put together a brief CRM and sales implementation plan

10.4 Put together a brief SCM implementation plan

10.5 Export spider plot

Summary

Terms

11. Finance, Logistics and Custom aspects of the export transaction

11.1 Export transaction process overview

11.2 Financial preparation

11.3 Logistics organisation

11.4 Customs

11.5 Financial closure

Summary

Case

Terms

Part IV - Export roll-out

Checklist IV: Export roll-out

Notes

Index

Foreword

When companies decide to start export development and internationalisation of their firm, it is essential to follow a systematic strategy formulation and decision-making process. Many companies start exporting products and services, without even considering putting together a programme for export development(!), which often results in an exporting landscape with non-priority countries, together with a portfolio of unwanted agents and distributors. “Historically grown” is what managers of such companies say afterwards. Therefore, a decision to start selling products and services to international markets needs to be well-founded and focused on those countries and markets with the best potential for successful entry and growth.

There are many ways of executing such a systematic strategy formulation and decision-making process. This book shows you one approach: a methodology to systematically and continuously develop export markets: from international strategy definition to export implementation. The whole process is referred to as export planning. It consists of four phases: export policy, export audit, export plan and export roll-out. Export Planning describes these 4 phases, and shows how to put together an international marketing plan in 10 steps.

This book intends to be pragmatic. It provides a method, a framework, and toolkit for Export Planning, a 10-step approach. The book should inspire you to explore the 10 steps and implement them within your company.

“The secret of successful international trade can be found in applying the 4 Cs1 of marketing and matching them with the 5 Ps for export: product, performance, partners, people and perseverance / PDCA.”

1 4 Cs are focusing on customer, cost, convenience and communication.

Acknowledgments

This book reflects the contributions, labour, and insights of many persons. I would like to thank my students, colleagues and clients for sharing their insights and understanding of export management theory and practice with me. It is impossible to single out everyone who has contributed to this edition, but I would especially like to thank the reviewers Frank Hauwert (former director Federation of the Dutch Export – FENEDEX –), Bert Vermeulen (Rotterdam Business School) and Mick Timmermans (Arnhem Business School) for providing feedback and the pleasant discussions which we have had during the last few years. I also would like to thank the publishers and staff at Pearson Benelux based in Amsterdam, The Netherlands. Special thanks to Neeltje de Kroon, Winny van Rijswijk, Inge van der Bijl, Elle Kanters and Saskia van den Brink.

From the many contributions of my students I would like to thank the following persons especially: Frank den Haan, Robert Hüfler, Pavel Kabanov, and Daphne Zijlstra. Besides the students, I thank my colleagues Frans de Swart, Darlene Gosch (INHolland Business School, The Hague), Leo Lodder (INHolland Business School Rotterdam), Ronald Salters (Fontys Business School), Roel Kalkwijk, Jan Jansen (Arnhem Business School) for the good discussions and their insights. In addition, I thank all companies, institutes, and persons for allowing me to use their copyright material.

Finally, I wish to thank my partner, Mai-Lan, who is a constant source of inspiration, support and happiness.

Düsseldorf,

February 11th, 2010

Joris Leeman

Herewith I would like to thank the following persons who have contributed to the updates in this new 2nd edition of Export Planning. First of all, the reviewers Johan Weggemans and Wouter van Olphen (both HZ University of Applied Sciences, The Netherlands). Next to that, all the companies who authorised me to use their copyright material. Finally, I thank my partner, Mai-Lan, for her patience and support during completion of all updates.

Düsseldorf,

August 10th, 2018 and February 28th, 2021

Joris Leeman

About the author

Joris J.A. Leeman is the founder of the Institute for Business Process Management. He has extensive experience in organising the back-end part of the business: organisation, supply chain management, IT systems, e-Commerce and e-Business, logistics, and sourcing operations. He is a consultant, lecturer and author. Prior to this he worked as a manager, director and executive for globally operating companies like MEXX, Johnson & Johnson, and Esprit.

Besides his consultancy activities, he is a part-time lecturer at the Arnhem Business School, HAN University of Applied Sciences, in The Netherlands. In addition, he acts as a freelance senior trainer in procurement and supply chain management for KPMG Germany. The trainings are for global leading companies and take place in Europe, Asia and USA.

He received his BA degree in Logistics & Economics from HAN University in The Netherlands. He received his MA degree in International Business and MBA degree from Webster University, St. Louis, USA. APICS: CPIM, CSCP, CLTD and SCOR-P certified.

Institute for Business Process Management

The goals of the Institute for Business Process Management are (1) to advise companies in improving their end-to-end business processes and organisation; (2) to train students, postgraduate students, employees, managers, and directors in the field of procurement, supply chain management, logistics, e-business, retailing, export management, and services management; (3) to publish books which enhance the knowledge of managing end-to-end business processes.

Other publications

2021

Joris Leeman,

Business Process Management, creating excellence in process and value proposition

(English), Joris J.A. Leeman. Books on demand, forthcoming 2021.

2020

Joris Leeman,

End-to-End Supply Chain Management; Fast, flexible Supply Chains in Manufacturing and Retailing

, (English), Books on Demand, September 2020. ISBN 9783751984577.

2020

Joris Leeman,

Supply Chain Management, Fast, Flexible Supply Chains in Manufacturing and Retailing

, 2

nd

edition (English), Books on Demand, August 2020. ISBN 9783751984508.

2017

Joris Leeman,

Supply Chain Management, Integrale ketenbesturing

, 2e editie (Dutch), Pearson Education, May 2017.

2010

Joris Leeman,

Supply Chain Management, Fast, Flexible Supply Chains in Manufacturing and Retailing

, (English), Books on Demand, April 2010. ISBN 978 38391 37918.

2007

Joris Leeman,

Supply Chain Management, Integrale ketenbesturing

, (Dutch), Pearson Education, May 2007. ISBN 978 90430 12867.

2005

Joris Leeman,

End-to-End Supply Chain Management; Fast, flexible Supply Chains in Manufacturing and Retailing

, (English), Books on Demand, October 2005. ISBN 38334 28651.

2004

Supply Chain Steuerung und Services, Logistik Dienstleister managen globale Netzwerke – Best Practices

. Springer Verlag, 2004. Baumgarten, H., Darkow, I.L, Zadek, H. Book contribution “Partnerschaft und Vertrauen für Supply Chains in der Bekleidungs-Industrie“, Fiege, Hugo und Leeman, Joris J.A., (German), Springer Verlag, 2004. ISBN 35404 43088.

Institute for Business Process Management

Joris J.A. Leeman MBA

www.institute-bpm.com

Preface

Aims and objectives

The purpose of this book is to show you how to plan and execute internationalisation within a firm. Export Planning explains a method, following a 10-step approach, to create an international marketing plan.

The objectives of this method are to enable you to:

Systematically select and plan

the entry into new international markets;

Enhance the chances of success through its

integrated review

of analysis and strategy with marketing, logistics, organisation, and finance;

Put together a sound

line of reasoning

from strategy to implementation.

This book provides you with an export planning model: a framework for the development of an international marketing plan; 4 phases presenting how to set up an export policy, export audit, export plan and export roll-out; 10 steps and 5 Ps for export, which can be used as a toolkit; a checklist to assess whether you are ready for export.

Target audience

Export Planning is written for bachelor and graduate students at business schools and universities. It describes export and international marketing at a strategic, tactical and operational level, and combines theoretic models with relevant practical experience.

A book that is useful not only for ‘thinkers’, but also for ‘practitioners’. Besides for students, this book is useful for anyone who wants to know more about export planning, international marketing and international market development. If you are an executive, manager, supervisor, entrepreneur, project leader, team leader, export employee, or export consultant, this book will offer you many useful insights, experiences from practice, and conclusions to be drawn from those insights and experiences.

Structure of the book

This book is made up of four parts: export policy, export audit, export plan and export roll-out. The first three parts consist of three chapters. The last part consists of one chapter. The ten chapters together form the 10 steps necessary to complete and execute the export planning process.

Export policy: refers to the international strategy development of the company. Does the company want to start export development yes/no? What is the company’s vision and mission? What are the drivers for going abroad? After analysing internally, the strategic position and direction of the company, and externally the trends (DESTEP analysis), opportunities and threats (SWOT analysis) several strategic options become visible. An international strategy definition will be made based upon the different strategic alternatives (SWOT matrix, GE portfolio analysis). Then it passes the first review gate question: do we want to internationalise our company yes/no? The export policy phase is described in Chapters 1 to 3.

Export audit: refers to the market entry analysis of the company. Which potential countries and markets can be selected for which product lines and/or services? What are local trends, how is the DESTEP analysis looking for these potential markets? How do we select and prioritise potential countries for market entry? What options do we have for market entry? What criteria are needed for evaluation of these market entry options? What is the impact of each market entry option on the value chain set-up (price setup, cost structure, and supply chain flow)? Then it passes the second review gate question: do we want to focus on the selected countries or markets yes/no? The export audit phase is described in Chapters 4 to 6.

Export plan: refers to the international marketing plan. Who is our customer or consumer? How many customer profiles and target groups do we have? On which ones do we mainly want to focus? Do we have to adapt our products to these target groups? Are there any cultural differences? What brand positioning are we seeking? Via what distribution channels do we want to sell and distribute our products? What marketing mix (with the 4 marketing Cs or Ps) do we have to put together? What organisation structure and set-up do we need to manage our overall business abroad? How are we going to organise the physical distribution, logistics, and supply chain flow? What information technology and systems do we need to set up to manage our customer, sales, marketing, logistics, and financial processes? What investments are needed based on the chosen market entry strategy? What will be the sales plan? What will be the project profit & loss statement and cash flow statement? What returns on our investments will we have? When the export plan is finished, the third review gate question will have to be answered: is this export plan a sound proposal go/no go? The export plan phase is described in Chapters 7 to 9.

Export roll-out: refers to the implementation of the export plan. What are the 10 most important milestones we have to realise in order to be able to make our first delivery in the new market? What are critical success factors, and do we have a fallback plan (best / worst case)? What implementation activities do we have to undertake in sales, customer relationship management (CRM), and marketing? What is the necessary sales and account plan? What is our CRM plan? What implementation activities do we have to undertake in logistics and supply chain management? What is the necessary logistics policy plan? After putting together the implementation plan, and executing and delivering the first sales order, the fourth and final review gate question appears: has our first sales and shipping order been successful yes/no?

The export roll-out phase is described in Chapter 10.

The four phases of the export planning process are continuously updated and improved. After the first foreign market has been successfully entered, the next market on the priority list needs to be ‘taken’. And so on.

Didactical aspects

In order to support you while reading Export Planning each chapter contains:

Learning topics at the beginning of each chapter;

Tables, figures, and other illustrations to easily pick up the most important aspects from the text;

An opening case as a general introduction to the theme, and a closing case with questions relevant to the learning topics;

Summary questions to review the learning topics from the chapter;

A summary of the chapter reviewing the learning topics;

A list with terms and its explanations.

New to the 2nd Edition

The 2nd edition of Export Planning, a 10-step approach, include following updates: A new chapter (Chapter 11) on the implementation of the export transaction has been added based on requests to explain in detail about the export delivery with respect to finance, logistics, and customs.

A new case has been added (Apple-case) in chapter 5. It replaces the Nokia case.

Several cases received minor updates (Mattel, Carrefour, Parle Products).

Paragraph 8.2 on incoterms and payment terms in the first edition have been moved to chapter 11.

Several tables and figures have been updated throughout the book.

A remark is added upon the use of weighting factors in the country filter analysis.

In paragraph 9.3 an explanation is added on the interest rate composition for the investment analysis.

Additional new material (example export reports, CAPEX/OPEX excel spreadsheets, cases, kick off-presentations for export projects, powerpoint slides and case exams) will be available for instructors on the supplements’ website. The instructor’s manual has been updated.

Note: The new chapter 11 includes more theory. It has been put on purpose at the end of the 10 steps, as the focus in this chapter is on the actual transaction implementation. However, chapter 11 could also be included at an earlier stage of the lessons. For example, in cooperation with Chapter 5.

Supplements

On the website (https://export-planning.jimdosite.com) you can find powerpoint slides (pdf files) which can be downloaded. This site also offers the export checklist and the export spider plot graph. Additional information can be found on the website of the Institute for Business Process Management (www.institute-bpm.com).

Export Planning Part I

Chapter 1 Introduction export planning

Chapter 2 Internal and external analysis

Chapter 3 Business strategy and internationalisation

PART ONE OF EXPORT PLANNING examines the role of export management within the company, and reviews the development of an export policy to enable systematic and successful internationalisation.

Chapter 1 introduces the role of export management within a firm. It shows the overall export planning process with its four phases: export policy, export audit, export plan and export roll-out. Finally, it presents the 10-step export plan structure, which is used as a guideline throughout this book.

Chapter 2 starts to explain how to create the basics for the export policy plan. It explains the elements of how to put together an internal analysis: mission, objectives, business definition, organisation, and capabilities. It then looks at the external analysis: DESTEP and trend analysis, and finalises with the SWOT analysis and TOWS matrix.

Chapter 3 completes the development of the export policy plan. Firstly, the general business strategy is defined together with its (international) growth directions. Secondly, the positioning of the different product lines, brands, and regions is determined together with the individual value propositions to gain a competitive edge. The chapter finalises with the 1st review gate: “Does our company want to go for internationalisation, yes/no?”

CHAPTER 1 Introduction export planning

At the end of the chapter you will be able to:

understand the market position of countries from an international perspective and know the export development of the leading export nations;

name the drivers for export development within an organisation;

describe the elements that influence the international strategy definition;

explain the export planning process and its 4 phases: export policy, export audit, export plan and export roll-out;

explain the 10-step export plan model.

Case Mattel: “Barbie: growing pains as the American girl goes global”

In 1976, a time capsule was buried to commemorate the U.S. bicentennial. The capsule contained items that captured the essence of America and included a Barbie doll, described as the “quintessential American”. Thirty years later, Barbie has become much more cosmopolitan. Although Mattel generates about 60 percent of its annual revenue in the U.S. market, millions of girls around the world have adopted Barbie as a favorite toy; Barbie is sold in more than 150 countries. Overall, Barbie is the best-selling toy brand in the world, and Mattel is the world’s largest toy maker. However, as Barbie approaches her fiftieth birthday, the fashion doll’s popularity is declining at home and abroad. For example, Bratz, a competing doll line featuring racing fashions, has exploded in popularity. By contrast, in the Middle East, the hottest-selling doll line, Fulla, is associated with Islamic values such as modesty and respect. Also, young girls are gravitating towards electronics devices such as digital music players. These and other trends spell trouble for Mattel, which depends on Barbie for about 20 percent of its annual sales.

What was the secret to Barbie’s first several decades of success? Ruth Handler, Barbie’s creator, believed that all children needed to play with mature dolls to effectively project their fantasies of growing up (Handler’s children were named Barbie and Ken). Though Mattel’s executives initially believed that a doll with a womanly bosom was improper and would never sell, Barbie became an instant success with American children.

Over time, Barbie’s look has changed to reflect changing fashion and cultural trends. In 1968, for example, the first black Barbie was introduced to cater to the growing African-American market. Hispanic and Asian American Barbies have also been created in response to the growth of America’s other ethnic markets. It was a natural step for Mattel to target untapped groups of children in other parts of the world. A strategy dubbed “Mattel 2000” focused on the company’s direction during the decade of the 1990s. As former CEO John Amerman noted, “There are twice as many children in Europe as in the U. S... Three times as many in South America and fifteen times as many in Asia... The potential market for products like Barbie... is mind boggling.” However, although Barbie has been successfully adapted to cultural differences in the United States, the opportunities for international growth come with formidable challenges. Even so, according to current CEO Robert Eckert, Mattel is “dedicated to becoming a truly global company.”

Europe

Mattel adopted a pan-European, region-centric approach to the Western European market. Barbie is a huge success in Europe; in Italy, France, and Germany average five Barbie dolls in their toy collections. In the early 1990s, Mattel developed a new “Friendship Barbie” to sell in Central and Eastern Europe. The new doll was less elaborate than its Western European counterpart, which sports designer clothes and accessories. By contrast, Friendship Barbie reflects the more basic lifestyle children had experienced under communism. However, although Mattel has experimented with multi-cultural dolls, the company discovered that little girls in Europe prefer the well-known American Barbie to the local versions.

The Middle East

Since being introduced in the Middle East, Barbie has faced opposition on political, religious, and social grounds. Parents and religious leaders alike object to the cultural values that Barbie and Ken portray. Writing in the Cairo Journal, Douglas Jehl noted, “To put it plainly, the plastic icon of Western girlhood is seen in the Middle East, where modesty matters, as something of a tramp.”

In Egypt and Iran, Barbie faces competition from several new doll brands aimed at providing an Islamic alternative to Barbie. As one Arab toy seller noted, “I think that Barbie is more harmful than an American missile.” Barbie’s challengers include demure-looking dolls such as Laila, who was designed according to recommendations of participants at the Arab League children’s celebrations in 1998. Laila wears simple contemporary clothes such as a short-sleeve blouse and skirt and traditional Arab costumes. Abala Ibrahim, director of the Arab League’s Department of Childhood, believes “there is a cultural gap when an Arab girl plays with a doll like Barbie... The average Arab’s reality is different from Barbie’s with her swimming pool, Cadillac, blond hair and boyfriend Ken.” [case shortened for editorial purposes]

Asia/Japan

Mattel has learned that, to be successful within a foreign culture, Barbie does not need a total overhaul but instead can be very profitable with minor cosmetic changes. For example, Barbie was successfully launched in India in 1995 and, while the core product remains unchanged, Indian dolls are painted with a head spot and dressed in sari.

Mattel has had more difficulty conquering the world’s second-largest toy market, Japan. The Japanese toy market is worth $8 billion in annual sales and is vital if Mattel is to achieve its goal of becoming more global. The Japanese market is notoriously difficult to penetrate as Mattel has found during 20 years of doing business in the country. Companies entering Japan must contend with complex distribution systems and intense competition from Japanese brands. Furthermore, dolls have a strong tradition in the Japanese culture with a heritage of over 800 years and ceremonial importance.

Mattel’s initial attempts to market Barbie in Japan met with limited success. Management presumed that Barbie’s success in other markets would be replicated in Japan. As John Amerman, CEO of Mattel in the mid-1990s, noted, “They didn’t know what that product was, and it didn’t work.” To boost sales, Mattel enlisted the services of Takara, a Japanese toy specialist. Through focus groups, Mattel learned that Barbie’s legs were too long and her chest too large – in short, Japanese girls did not relate to Barbie’s physical attributes. Also, Barbie’s eyes were changed from blue to brown, and the doll ultimately took on a look that was appealing to the Japanese children’s sense of aesthetics. The Takara Barbie was born.

Although sales improved, a licensing disagreement prompted Mattel to terminate the relationship with Takara and search for a new partner in Japan. Takara continued selling the doll as Jenny, which, ironically became a competitor to the new Japanese Barbie. In 1986, Mattel joined forces with Bandai, Japan’s largest toy company. Bandai produced Maba Barbies (“Ma” for Mattel and “ba” for Bandai) with wide brown eyes. Due to its similarities to the Jenny doll, however, Maba Barbie was withdrawn from the market before it achieved success. [...] Once again, market success eluded Mattel. Mattel was committed to neither Japanese style nor an American style and competed poorly against dolls whose identity was well defined. However, Mattel realized that its competitive advantage lay with its American culture. Though Mattel had attempted to adapt to Japanese culture, Mattel discovered once again that girls prefer the well-known Barbie to the local versions. In 1991, Mattel ended its relationship with Bandai and opened its own marketing and sales office in Tokyo. Mattel introduced its American Barbie to Japan and experienced success with “Long Hair Star Barbie”, which became one of the top-selling dolls in Japan. Although financial losses mounted until 1993, in 1994 Barbie made a profit in Japan with sales almost doubling since its reintroduction. [...]

Writing in Mattel’s 1999 Annual Report, acting CEO Ronald Loeb promised that the company “will proactively adapt its products to local tastes, economic conditions, and pricing, rather than viewing the rest of the world as an extension of our U.S. strategy.” At the same time, Richard Dickson, senior vice president of Mattel’s girl’s consumer products worldwide, believed Barbie’s global strategy must originate from a perspective of worldwide cohesion. He noted, “If I go on a plane from France to Japan to the United States and there’s a Barbie billboard, you’re going to sense that it’s the same Barbie [in all three countries].” To facilitate its global approach, Mattel has given the U.S. President of Barbie the full responsibility for the brand around the world. [case shortened for editorial purposes]

Barbie doll get’s new looks*

Barbie’s manufacturer, Mattel, announced on Jan. 28th, 2016 that the doll has three new body types — curvy, tall and petite. Barbie will also now come in seven skin tones, 22 eye colors and 24 hairstyles. Mattel spokeswoman Michelle Chidoni said the product is evolving to “offer more choices” to make “the line more reflective of the world girls see around them.” It is clear that Mattel has been striving to create a glocal marketing footprint, meaning a global brand with a local product taste.

Source: Revised and updated originally written by Alexandra Kennedy-Scott, David Henderson, and Michel Phan, ESSEC Business School. Warren Keegan, Mark C. Green, Global Marketing, 5th edition, page 143-145, Pearson Education. 2008.

*Updated by Leeman in Jan. 2017, based on article in The Japan Times, January 29th, 2016.

1.1 Internationalisation of the organisation

The struggle for success of Mattel’s Barbie in foreign markets is a typical example for many companies going abroad. Adaptations to specific customer target groups in the foreign market are no guarantee for successful internationalisation. Even Mattel with its enormous marketing skills and brand positioning power of the brand “Barbie” faced difficulties in finding the right mix of global versus local adaptation.

This book on Export Planning will take you on a journey showing how to have your organisation go international, set up international marketing, and execute its first sales and order deliveries. In other words, how to plan and implement international market development.

Chapter 1 provides an overview of the content of this book. Internationalisation of the organisation requires a clear strategic commitment and vision/mission of the firm. Next, the process of planning and organising the internationalisation, the export planning process means a systematic approach in entering and developing the international business. This chapter introduces the role of export for countries, and role of export management within a firm. It shows the overall export planning process with its four phases: export policy, export audit, export plan and export roll-out. Finally, it presents the 10-step export plan structure which is used as a guideline throughout this book.

Many companies start internationalisation of their business during and after a successful growth phase. Most of the time, opportunities are spotted or customers put requests forward to deliver the products and / or services abroad. Figure 1.1 shows an overview of the export development of the largest export nations in the world between 1980 up to 2015. Historically, the United States of America and Germany are the two largest export nations in the world. However, as can be seen from the graph, China has been climbing up to the 1st position, leaving the U.S. and Germany behind. The statement “China is the factory of and for the world” is very much true in this respect.

Figure 1.1 Export development of largest export nations

Table 1.1 Top 15 largest export nations worldwide

1980

1990

2000

2007

2015

1

Germany

192.9

421.1

551.8

1,326.40

1,329,00

2

China

18.1

62.1

249.2

1,217.80

2,275,00

3

USA

225.6

393.6

781.1

1,162.50

1,505.00

4

Japan

130.4

287.6

479.2

712.8

625,0

5

France

116

216.6

327.6

553.4

506,0

6

Netherlands

74

131.8

233.1

551.3

567,0

7

Italy

78.1

170.3

240.5

491.5

459,0

8

United Kingdom

110.1

185.2

285.4

437.8

460,0

9

Belgium

54.3

114.2

188.4

430.8

398,0

10

Canada

67.7

127.6

276.6

419

408,0

11

South Korea

17.5

65

172.3

371.5

527,0

12

Russia

...

...

105.6

355.2

340,0

13

Hong Kong

20.3

82.4

202.7

349.4

511,0

14

Singapore

19.4

52.7

137.8

299.3

351,0

15

Mexico

18

40.7

166.4

272

381,0

Why have some of these countries been able to maintain their export position and others somehow lost track? Will these leading countries also keep their position in the next 100 years? Let’s look at the positioning of countries from a marketing point of view.

1.2 Country position and market attractiveness

Although you probably would not immediately think about this, but countries do compete with each other: for example, on tourism, medication and health centres, logistic ports and distribution, financial centres, innovation and centres of excellence in specific technology fields. Like companies, countries also have to position themselves as centres of production and/or services in the different industries. Michael Porter1 has written a book entitled ‘The competitive advantage of nations’, in which he presents six factors which lead to competitiveness of nations:

Factor advantages

. Basic: advantages in raw materials, climate, location, low and middle level of educated workers. Advanced: modern telecommunication, modern infrastructure, highly educated workforce and specialised research centres.

Type of domestic demand

: Refers to the structure of domestic demand and its focus (high level versus not so sophisticated), size, growth pattern and availability of transfer mechanisms to other countries.

National competitiveness

: Refers to the intensity of competitiveness, its number of competitors and the framework in which competition takes place, like culture, governmental support, level of travelling, relationship types between companies and their customers.

Network of internationally competing suppliers

: Allows for faster information input of new technologies, insights and innovations.

Coincidental factors

: Unplanned occurrences, like strikes, innovations, war, currency exchange fluctuations.

Governmental policy

: Focusing on the first four factors to stimulate its economy.

It is clear that countries need to develop their economy to increase their Gross Domestic Product (GDP) and income per person. However, depending on these six factors, countries have different starting positions. Some countries are relatively small, but have a highly educated population – like Singapore – and other countries are very large, but have a low educated workforce – like South Africa. As a result of these factor differences, countries have a different market position and market attractiveness in the world’s economies.

Figure 1.2 presents a country ranking overview based on market position and market attractiveness.2 Western European countries, NAFTA region (United States of America, Canada, and Mexico) and Japan formed the big trade blocks of the 1980s. Over the last 15 years, the BRIC countries (Brazil, Russia, India and China) have been developing fast, and China and India in particular are set to determine the world economy in the future.

Figure 1.2 Country ranking overview 1995 towards 2050

Source: A. Kok & Partners.

To move up on the market positioning and market attractiveness ladder, countries have to work on the aforementioned factors for competitive advantage. That is why a lot of countries try to create centres of excellence for specific products or services. For example, China very much focuses on manufacturing; India focuses on information technology services. The Netherlands focuses on trading and logistics, “Mainport to Europe”, agriculture (flowers), and banking and financial services just to name a few. Germany focuses a lot on engineering, chemicals, machine and car manufacturing. What do you think is the main focus of Middle Eastern countries today? What do you think it will be in the next 30 years? Middle Eastern countries currently rely heavily on exporting oil. However, as oil wells are drying up, these countries are shifting their attention more and more towards tourism, trading, and financial services. Just look at all the development activities taking place in Dubai. In conclusion, countries need to position themselves in order to maintain and have further development of their economies and enable their population to enhance their income and quality of life.

1.2.1 Markets versus sourcing

Another aspect, for countries as well as for companies, is the development of customer markets and regions to execute the sourcing and manufacturing. Smaller countries form regional trade blocks to create a substantial internal market and enable local regional sourcing at attractive regional duty and tax rates. For example, Europe is expanding its European Union to enlarge its internal market size and population. And it also creates opportunities for low-cost sourcing from Eastern European countries. Furthermore, North America created NAFTA and is very much working on strengthening relationships with South America to both create a bigger market and have an attractive local sourcing region as well. In addition, Asia is developing the ASEAN trade community to foster an internal Asian market region and local regional sourcing. Figure 1.3 shows an overview of these developing “trade blocks”.

What will be the direction of Russia and the former states of the Soviet Union? What will be the position of India on the world market? The internal size of these markets is already huge enough to support a sufficient internal market size and sourcing region. The Middle East is working very hard to create financial – and trading – hubs to develop its own markets in the region, and export abilities out of certain potential African sourcing regions.

Figure 1.3 Developing markets and sourcing “trade blocks”

1.2.2 Internationalisation equals globalisation?

After making the side step to market positioning and attractiveness of countries, let us go back to the internationalisation of companies. Four questions are relevant. What are drivers for companies to start export development and internationalisation? Is internationalisation similar to globalisation? What is exporting? Is exporting the same as international marketing?

Drivers for export development and internationalisation

First of all, the most common drivers behind companies’ international ambitions are:

Market development as a strategy

Need to follow its customer

Competition

Opportunities

“Market development as a strategy” refers to the growth model of Ansoff. When companies reach a mature stage in their home market, market development, i.e. internationalisation, is one of the possibilities to further grow the business.

“Need to follow its customer” refers to the demand / requirement of the company to follow the customer abroad. For example, automotive suppliers have to follow the big car manufacturers into low-cost countries to keep their business.

“Competition” refers to the need to follow or proactively enter a country or region to face or be ahead of its competitor’s internationalisation efforts.

“Opportunities” refer to the external trends which offer market opportunities in certain countries or regions.

Types of internationalisation: EPRG model of Perlmutter

Secondly, exporting is not the only form of internationalisation. Perlmutter3 described four types of organisations that have a different internationalisation process. This model is called the EPRG model:

Ethnocentric organisation

Polycentric organisation

Region-centric organisation

Geocentric organisation

In the ethnocentric type the organisation is driven by its home market. Decisions are taken based upon what is good for the home market. Export orders are handled out of its home market and are viewed as additional sales.

In the polycentric type the organisation is locally oriented, meaning each foreign country has its focus on local culture and needs. Multinational organisations (MNO) very often have local subsidiaries in countries to be able to understand and adapt to local needs and respect the local culture.

In the region-centric type the organisation focuses on regional market needs instead of country needs. This internationalisation setup moves towards the “trade block” developments we discussed before.

In the geocentric type the organisation acts as a transnational organisation. A transnational organisation views the world as its marketplace and creates centres of excellence in these regions where it makes the most sense. There is no difference between the firm’s home market and other international markets.

Internationalisation as a process is different from globalisation. Globalisation is the result of trading, i.e. selling and sourcing in different markets, on a worldwide scale.4Internationalisation can have its scope on a smaller scale, focusing on international trade between certain countries; however it could also include a more global approach. See the aforementioned internationalisation types from Perlmutter. So, internationalisation is a part of globalisation.

What is exporting?

Exporting means marketing, selling, and distributing goods or services from one country to another country or countries. It includes importing and reselling goods or services as well. From a classical point of view, exporting refers to the ethnocentric and polycentric organisation type as defined by Perlmutter: the organisation is internationalising by means of selling products or services towards other countries.

Exporting versus international marketing

The last relevant question on internationalisation focuses on whether there is a difference between exporting and international marketing. The definition of exporting includes the marketing, selling and distribution of goods and services. International marketing basically only covers the marketing part. However, during the last few years international marketing has more or less been treated equal to exporting and export management. Therefore, in this book exporting and international marketing are being treated the same. However, be aware that international marketing covers the relevant marketing aspects for all types of internationalisation according to Perlmutter, contrary to exporting which focuses mainly on the ethnocentric and polycentric types.

1.3 Export policy

When companies decide to start export development and internationalisation of their firm, it is essential to follow a systematic strategy formulation and decision-making process. Many companies start exporting products and services without even considering putting together a programme for export development (!), which often results in an exporting landscape with non-priority countries, together with a portfolio of unwanted agents and distributors. “Historically grown” is what managers of such companies say afterwards. Therefore, a decision to start selling products and services to international markets needs to be well-founded and focused on those countries and markets with the best potential for successful entry and growth.

How to execute such a systematic strategy formulation and decision-making process? There are many ways of doing this. This book shows you one approach: the international strategy definition process, or said in another way, export policy process. The elements which influence the international strategy definition are presented in Figure 1.4. First of all, the figure shows three drivers for export development. Secondly, these three drivers will impact the strategy formulation process in the boardroom. What is our vision? Who do we want to be? Who do we want to serve? Do we want to be internationally active? Why? Do we need to, because of competition or customer requirements? Thirdly, suppose we start developing our export, does this bring us enough sales and gross margin? Does it bring us a good market position after successful entry? Can operations handle it? What about the fixed and variable costs to set this up? What is the estimated break-even level? Will we have any leverage in our overall economies of scale? What about the financial and supply chain risks? And so on; many questions are to be answered, before a decision can be taken to start export development and internationalisation.

Figure 1.4 Elements influencing the international strategy definition

The international strategy definition is part of the overall export policy process. The export policy process reviews whether export development is attractive for the company, whether it fits in the vision/mission, and how to organise export planning and execution. Figure 1.5 shows an overview of the export policy process elements.

Figure 1.5 Export policy process elements

Based upon the strategic fit with the vision/mission, the company will start planning its export development and internationalisation activities. At planning level, the potential markets for the different product lines and services will be analysed (SWOT analysis), a definition of the international strategy will be made (which markets are attractive? What type of growth may we expect? Are we really committed?), and an export plan (which is an international marketing plan) will be created including the resource allocation of personnel and investment capital needed.

1.4 Export planning

The whole process of international strategy formulation, detailed internal and external analysis, international marketing planning, and implementation is called: export planning. This book describes the 4 phases, and shows how to put together an international marketing plan in 10 steps. The four phases are: export policy, export audit, export plan, export roll-out. Figure 1.6 presents an overview of this export planning process.

Figure 1.6 Export planning process

Export policy: refers to the international strategy development of the company. Does the company want to start export development yes/no? What is the company’s vision and mission? What are the drivers for going abroad? After internally analysing the strategic position and direction of the company, and externally the trends (DESTEP analysis), opportunities and threats (SWOT analysis) several strategic options become visible. An international strategy definition will be made based on the different strategic alternatives (TOWS matrix, GE portfolio matrix). Then it passes the first review gate question: do we want to internationalise our company yes/no?

Export audit: refers to the market entry analysis of the company. Which potential countries and markets can be selected for which product lines and/or services? What are local trends, how is the DESTEP analysis looking for these potential markets? How can we select and prioritise potential countries for market entry? What options do we have for market entry? What criteria are needed for evaluation of these market entry options? Do we treat every criterion the same in weighting? What is the impact of each market entry option on the value chain setup (price setup, cost structure, and supply chain flow)? Then it passes the second review gate question: do we want to focus on the selected countries or markets yes/no?

Export plan: refers to the international marketing plan. Who is our customer or consumer? How many customer profiles and target groups do we have? On which ones do we mainly want to focus? Do we have to adapt our products to these target groups? Are there any cultural differences? What brand positioning are we seeking? Via what distribution channels do we want to sell and distribute our products? What marketing mix (with the 4 marketing Ps) do we have to put together? What organisation structure and setup do we need to manage our overall business abroad? How are we going to organise the physical distribution, logistics, and supply chain flow? What information technology and systems do we need to set up to manage our customer, sales, marketing, logistics, and financial processes? What investments are needed based on the chosen market entry strategy? What will be the sales plan? What will be the projected profit & loss statement and cash flow statement? What returns on our investments will we have? When the export plan is finished, the third review gate question will have to be answered: is this export plan a sound proposal go/no go?

Export roll-out: refers to the implementation of the export plan. What are the 10 most important milestones we have to realise to be able to make our first delivery in the new market? What are critical success factors, and do we have a fallback plan (best / worst case)? What implementation activities do we have to undertake in sales, customer relationship management (CRM) and marketing? What is the necessary sales and account plan? What is our CRM plan? What implementation activities do we have to undertake in logistics and supply chain management? What is the necessary logistics policy plan? After putting together the implementation plan and executing and delivering the first sales order, the fourth and final review gate question appears: has our first sales and shipping order been successful yes/no?

The four phases of the export planning process are continuously updated and improved. After the first foreign market has been successfully entered, the next market on the priority list needs to be ‘taken’. And so on.

1.5 10-step export plan structure

So far a lot of questions have been raised during the explanation of the four phases of the export planning process. This paragraph explains a 10-step structure to help answer all these questions and put together an international marketing plan, or export plan, which can be presented to the board of directors as a proposal for export development and internationalisation. And it also aids the creation of a customer relationship management plan and supply chain plan, or logistics policy plan, to present as an implementation plan for the export roll-out.

Figure 1.8 shows an overview of the 10-step structure for the development of an international marketing plan or export plan.

Step 1

: provides a brief overview of the company: its history, sales by division and region, organisation structure, main competitors.

Step 2

: describes the internal and external analysis. The internal analysis focuses on the internal capabilities for export development, strengths and weaknesses, 7S model. The external analysis focuses on the opportunities and threats in the existing markets and DESTEP factors.

Step 3

: shows the SWOT analysis, trend analysis for the relevant product lines and SWOT matrix with the business strategy options. It furthermore shows the current business strategy and recommended internationalisation strategy based on models like Ansoff, Porter, Hamel & Prahalad, Treacy & Wiersema, PLC, and BCG.

Step 4

: provides a country selection model, based on a 3-step filter process, to enable selection and prioritisation of the most attractive countries/markets with the highest potential.

Step 5

: creates an overview of the value chain and supply chain setup for the new selected export markets.

Step 6

: summarises the different market entry options based on a set of entry criteria. It concludes with a recommended export market entry strategy.

Step 7

: provides an overview of the proposed international marketing mix: it includes the distribution channel strategy, its customer target group selection, brand positioning, price setting, consumer and competitive positioning and 4 Ps or 4 Cs of the marketing mix.

Step 8

: describes the logistics and distribution setup for the new selected markets. It includes distribution channel management (exclusive, selective, intensive), capacity requirements, planning, and BEP values. It furthermore refers to the organisation and management of the new export development setup. It includes the suggested organisation structure, impact of cultural differences, and how to handle them and required human resources over the next years.

Step 9

: shows the financial plan and relevant legal issues. It provides a sales and account plan, its profit & loss statement, cash flow statement and investment analysis based on models like payback method, ROI, NPV, and IRR. The legal issues focus on all relevant issues concerning consumers, customers, governmental regulations, and suppliers and partners.

Step 10

: provides the 10-step milestone plan to realise the market entry, and sale and delivery of the first order.

Figure 1.7 10-step structure for the development of an international marketing plan

Step 11

: describes the implementation of the export development on the front end: its customer relationship management implementation plan more in detail. It includes a sales and account plan, a detailed contact strategy plan, and customer relationship management setup for the programme for acquisition, retention, and building loyalty.

Step 12

: describes the implementation of the export development on the back end: its logistics and supply chain implementation more in detail. The supply chain plan, or logistics policy plan, includes a detailed setup of its physical distribution (inventories, distribution centres, transportation), planning (material handling, capacity planning, forecasting) and supply chain setup (business process model, tradeoffs in time, costs, service, and quality).

The 10-step export plan structure is the basis for this book. The next chapters describe each step in detail. As a result, the reader will be able to construct his/her own template for putting together an export plan (international marketing plan). Next, the export roll-out with its implementation planning on both the front end and back end, as outlined in steps 11 and 12, will be described briefly as well. In this 2nd edition a new chapter on export implementation (chapter 11) has been added upon request of the users. Chapter 11 describes the actual export transaction implementation: its finance, logistics and customs aspecs to deliver the export sales order to the customer.

In the 10-stepmodel, the export roll-out phase consists of 3 steps, taking the total number of steps up to 12, instead of 10. Why is that? The reason for that is that a lot of things still need to be organised after the final decision has been made to enter a new market or country. The creation of a milestones list is a first step towards putting together the most important “milestones”, in order to have a successful launch of the product or service into the market. The next steps will have to focus on the implementation of the front-end activities, such as the development of the CRM and sales plan (step 11), and on the implementation of the back-end activities, such as the development of the SCM plan (step 12). The CRM and SCM plan, in the model referred to as steps 11 and 12, are made up of detailed plans for the organisation of the entry into the market. Describing steps 11 and 12 in detail does not fall into the scope of this book, as it would probably double the size of the book.

Figure 1.8 Export planning process and chapter overview

It is important to mention that this 10-step export plan structure presents a lot of models that can be used to put together the export plan (international marketing plan). However, each company is unique and has its own unique situation, which means that the required use of models may be different or less. If you create an export plan, do realise that you have to “customise” it to the actual company’s situation, as export planning is not just “following the 10-step structure and filling out the models”. Figure 1.8 provides an overview of the export planning process and related chapters of the book. The book follows the four phases of the export planning process. Each part of the book contains one phase: export policy, export audit, export plan, and export roll-out. Within each phase, three chapters describe the methods and tools to complete the necessary export planning steps.

Summary

Know the export development of the leading export nations

Historically, the US and Germany are the two largest export nations in the world. However, China has been climbing up to 2nd position, leaving the US behind in 3rd. The Netherlands is a relatively large export nation, considering its small geographic size and population; maintaining 6th position on the world ranking.

Understand the market position of countries from an international perspective

Not only companies compete with each other. Countries do too, such as on tourism, medication and health centres, logistic ports and distribution, financial centres, innovation and centres of excellence in specific technology fields. Like companies, countries also have to position themselves as centres of production and/or services in different industries. Over the last 15 years, the BRIC countries (Brazil, Russia, India and China) have been developing fast, and China and India in particular are set to determine the future’s world economy.

Name the drivers within an organisation for export development

The most common drivers behind companies’ international ambitions are: market development as a strategy, need to follow its customer, competition, and opportunities.

Perlmutter described four types of organisations with a different internationalisation process and organisational structure. The model of Perlmutter is called the EPRG model: ethnocentric organisation, polycentric organisation, region-centric organisation, geocentric organisation.

Describe the elements that influence the international strategy definition