Tasks and tools for a systematic development of international activities

12.03.2012

SME 1

Step by Step to International MarketsTasks and Instruments for a Systematic

Development and Expansion of Foreign Activities

Vilnius, 2012-03-15

Moderation

Alexander Frevel

Part-financed by the European Union (European Regional Development Fund and European Neighbourhood

and Partnership Instrument)

Sveiki!

Opening speech

Ms. Lina Vaitkeviciene

Deputy Managing Director, Enterprise Lithuania

12.03.2012

SME 2

BalticSupply

… supports SME networking in the Baltic Sea Areathat can create new business opportunities.• The BalticSupply project strives to foster innovation in the Baltic Sea Region

in order to make the region a prosperous place to live, work and do business. In order to do this the project will implement the Small Business Act, which means promotion of entrepreneurship and strengthened SME structure.

• Basically, it should be easier for small and medium sized enterprises to do business cross nationally in the Baltic Sea Region.

• Specifically, the BalticSupply project will create a network mechanism between Baltic Sea Region small and medium sized enterprises (SMEs) as well as a networking mechanism between SMEs and original equipment manufacturer (OEMs), which is larger public or private units doing larger procurements and, thereby, searching for service or product solutions from SMEs.

• By bringing Baltic Sea Region SMEs and OEMs together in the innovative cluster concept the project facilitates exploration of new markets from both the supply and demand side.

Seminar Schedule

09:30 Opening speech: Ms. Lina Vaitkeviciene, Deputy Managing Director, Enterprise Lithuania

Welcoming address; course schedule and contents, objectives of the seminar: Mr. Alexander Frevel, Hanseatic Parliament

09:45 Future trends in the Baltic Sea Region: Ms. Elina Priedulena, Hanseatic Parliament

10:15 Business on international markets – Good Practice of enterprises11:15 Coffee break11:30 Tasks and Tools for a systematic development of international activities:

Alexander Frevel13:00 Lunch break14:00 Tasks and Tools … (continuation)15:30 Coffee break15:45 Information Management / Exchange of Experiences on successful

activities: Alexander Frevel, Elina PriedulenaInternational Business Support Services for SMEs: GediminasRickevičius, Enterprise LithuaniaEubizz.net – Baltic Supply Road Show “Get on board!” (Video)

12.03.2012

SME 3

Taking position

• I have much experience with business activities abroad

• I know possible target countries for my export activities

• I know that my products and services are internationally marketable

• I already have (I plan) a drawing up of an export strategy

• Our internal processes are aligned to international cooperation

- +

Introduction of Participants

• Name, sector, business (personnel, qualifications), range of service (products and services)

• Experience with activities in international space / interests in export

• Assessment of own development needs

• Own goals and expectations concerning the seminar

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SME 4

Objectives of the Operational Seminar

Export• Ability to recognise and classify various forms of

international cooperation in foreign trade in their importance for your own business.

• Ability to recognise and describe contributions in kind and services of one's own business suitable for export.

• Ability to recognise and develop the export potential of the business, management and staff.

• Getting to know the elements of a business plan.

• Knowledge of success factors for the business / foreign trade activities.

Future Trends in the Baltic Sea Region-Potential for SMEs

Elina Priedulena

Hanseatic ParliamentHamburg/Germany

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SME 5

Business on international markets

Examples from German Companies

Securing Jobs through Internationalisation

Carpentry/joinery and construction business

Established in 1919

55 employees including 5 trainees

Everything from a single source:– Office for structural engineering and building construction

– Wooden frame manufacturing with the use of the most modern machine park in heated buildings with RAL Quality Label

– Turnkey implementation of construction projects

– Creation of a youth camp for EXPO 2000

• Cooperation with partner companies for heating, electrical engineering, tilers, painters

• International activities in SwitzerlandHotel Palafitte,

Neuchatel

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SME 6

Development of International Market Niches

Electrical engineering

Established in 1991

50 employees, 1 trainee

Consultations, planning and project implementation for– Burglary and fire alarm systems, smoke detection systems

– Video surveillance systems

– Electrical installations

– Intelligent building management

– Airport engineering, airfield lighting

• Ongoing training of all employees; exchange of trainees with Northern Ireland

• Targeted increase of awareness level– Visiting trade fairs in Slovakia, Slovenia, Bosnia and Herzegovina, Czech Republic,

Poland, Ireland, Russia…

• Joint venture with companies in Bosnia and Herzegovina, Ukraine, Slovakia and Poland

• Establishment of an international pool of companies to improve economic relations in Asia and Africa

Measuring the EnvironmentOur demand to make your application successful

Environmental measuring technology and meteorology

10 employees including 3 trainees Meteorological and environmental measurement technology: sensors, systems

and measurement networks (especially atmospheric deposition collection and analysis)

– Development, manufacturing, distribution and engineering– Precision mechanics small-scale production (medical technology and aerospace)

– Development and manufacture of handling equipment

– Individual production for applications in science research, and industry

– Distribution and consulting of ground water data loggers from the Netherlands to Germany

• Qualified team of experienced employees capable of working in a team• Strong international focus: approximately 70% of export• From the development of series production to sales and

after-sales service: everything in close consultations with partners• Close cooperation with global partners

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SME 7

Complete Solutions for Individual Living Spaces of Demanding Customers

Carpentry14 employees including 2 trainees

– Production of small series– Manufacture of complete equipment,

supply of complementary systems in order to make a room complete

– Manufacture / delivery of high quality facilities andfurnishings for private yachts, private jets, villas, reception areas and boutiques

– Exclusive interior design

• Know-how and high quality at reasonable prices• Opening up markets abroad through medium-sized projects• Responding to individual customer needs • Complete solutions from a single source:

customers do not need to worry about anything• Partnership cooperation with suppliers and general designers• Varied range of offered services which is continuously expanded

Custom-Built Security Made in Germany

18 employees, including 3 under further training measures

Development, manufacture and installation of– Security windows, doors and facades for high security areas– Access control and monitoring systems– Planning and implementation of complete system solutions for high security

areas

• Consistent customer orientation – which products and services are required in which quality

• Intensive country-specific market research• Own developments with production in Germany• Offer of complete solutions from planning,

manufacture, installation, commissioning to training • Products and solutions with unique selling features • Cooperation with distribution partners in the

respective countries• Training cooperation partners in Germany

12.03.2012

SME 8

Module: Export capability

Challenges

• Globalisation / Internationalisation

!Threat

Opportunity

• Pace of technological change

• Socio-demographic transition

• Rules and standards

• Changed customer expectations

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SME 9

Efficiency� � Product � Process� � Productivity � Innovation power

Education� Knowledge, skills � Competences� � Expertise / abilities

Values� Attitude � Behaviour � Motivation

Framework conditions

� Commercial, tax law � Partnership� Language, culture � Corporate� Management governance

Foundations of export potential

© Alexander Frevel

The House of Export Capability

Individual Export Capability

Personally available knowledge– Language skills– Legal regulations – …

Individually acquired skills and experience– Communication and cooperation skills– Self-observation and self-management skills– Social and methodological skills– ...

Personal attitudes / behaviour– Openness to third parties– …

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SME 10

Business Export Capability

Knowledge available within the enterprise– Commercial, fiscal law …– Labour, environmental regulations, … – Business and corporate governance/ culture (e.g. employer-employee

relationship, customer needs, …)

Skills gained in the company and gathered experienc e– Integration of foreign employees / cooperation with foreign partners– Self-observation and self-management skills

Entrepreneurial attitudes / behaviour– Partnership relationships rather than purely commercial interests

Environment and Individual

Increasing the export capacity

Professional competence

Attitude,Behaviour

Management organisation

Exportenvironment

© Alexander Frevel

12.03.2012

SME 11

Stages on the Way to Foreign InvolvementTasks and Tools

Market selectionMarket

selectionPreparationPreparation

Market entry

Market entry

Analysis of own business model

Internationalisation profile

Country observation Target positioning

Market attractivity Market entry strategy

Environmental analysis

Vision and objectives

Development and qualification of options

Implementation strategy

Implementation of core processes

Process optimisation(e.g. balanced scorecard)

Market expansion

Task

sIn

stru

men

ts

Project management

Marketing

SWOT Analysis

Business plan

Service engineering

Building infrastructure Expansion

Market processing

abroad

Development Objectives

• Ability to estimate the marketability of products/services in the "receiving country."

• Researching the most important framework conditions of the receiving country or knowing where and how to obtain the necessary information .

• Ability to (want to) meet the requirements for "export " and knowing how to find suitable cooperation partners.

• Knowledge of the essential requirements concerning the "export-concept including a business plan “ and ability to create such a concept on your own.

• Ability to explore and perceive funding opportunities (fairs, cooperation exchanges, financial support...).

• Knowing the regional, national and international support and advisory institutions or at least knowing how to find them out.

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SME 12

Aspects in the Selection of the Target Country

Target country

Culture, mentality

Local contacts,knowledge of the

country,language skills

Spatial distance,framework conditions

Opportunities & threats of the market,

market potential, information gathering

Source: Sölter 2009

Forms and Types of Foreign Trade

• Pure export– Product delivery

– Provision of services

– Delivery of products plus services

• Cooperation / strategic alliance with other domestic companies (e.g. marketing, sales)

• Cooperation / strategic alliance with foreign enterprises (e.g. sales, assembly)

• Own branch

• Joint venture / franchise etc.

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SME 13

Work Task

Please discuss in small groups:

What are the advantages/disadvantages of each different form of foreign trade activities?

Discuss in small groups and be prepared to present the results afterwards.

Time: approx. 10 min.

Activities within Export

Experience of the

provider

Phase Strategy type Implementation form of

international strategy

Subject of performance Measure

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…

…

…

…

…

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SME 14

Work Task

Answer for your own company and fill in the list of activities:

Which form of international cooperation suits my enterprise and my service scope best?

Work Task

What do you think you need to develop an export-concept?

Discuss in small groups and be prepared to present the Results afterwards.

Time: approx. 20 min.

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SME 15

Development of an Export Concept

• Market analysis and marketingcompetition analysis, target group analysis (AIDA method)

• Information and communicationInformation management, knowledge management (gathering, storage and dissemination of information)

• Uniqueness

Market Analysis

You want to predict / estimate,

• how your customers will behave in relation to your product/service (= buy / not buy),

• who exactly these customers are / can be

• for what reasons these customers will buy your services and not the services of your competitors.

The central question is:

• Which of my (contributions in kind) and services ar e also of interest for the foreign market and thus exportable?

12.03.2012

SME 16

Market Analysis - Product on the Market

• How does your product / service stand out on the market?

• Why exactly will your product / service find buyers?

• Can your product adapt fast enough to the changing market conditions?

• How is the situation on the commodity market, who are the relevant suppliers, what’s about the employees? � Is it possible to ensure high-quality and cost-effective production

which can also respond to rapid changes on the market?

Market Analysis - Competition

• Who is "the competition?"

• Do you know the current and future offer of the competitors? - What products / services are in the assortment?- What products ... are in the pipeline? - What purchase conditions can be implemented? - Are there any advantages of location? - How high are the production and sales prices?

• What market share do you aspire to and how long can you maintain your competitive advantage?

12.03.2012

SME 17

Market Analysis - Customers / Target Group

Core of the market analysis• Who purchases the product / service?

• Where does the customer purchase the product?

• How does the customer purchase the product?

• Why does the customer purchase the product?– Ideal situation: You know your customers by the name and explore their

preferences during the preparation for the purchase and the actual purchase action

– or: You could have already sell your product or your service successfully among friends.

Marketing

Attention � the first attention can be awakened in the customer

Interest � the customer shows interest

Desire � the customer acknowledges the "feeling of hunger"- he/she wants to buy the product

Action � the purchase takes place

Possible distribution channels and the sales situat ion • In which places (location, logistics), • at what times and • in what situations can you sell most successfully? • Can you implement the AIDA sales formula successfully?

12.03.2012

SME 18

Which Information is Important in Marketing?

• Assessment of the market and customer:– what my customers want / need

– what I can / want to provide

– how the customers want / can be addressed

• Own work quality and prices in relation to competition

• Convenient shopping facilities

• Cooperation partners, e.g. for larger projects

• Work planning process– Application possibilities of employees

– Logistics of operating resources

• ...

Work Task

Please discuss in small groups:

What are the key factors for a successful export offensive?

Discuss in small groups and be prepared to present the results afterwards.

Time: approx. 15 min.

12.03.2012

SME 19

Information as a production factor

DataKnowledge

Processing information

Success Factor of Information and Communication

• the prerequisite

• the subject (means and topic)

• and the result

An active information and communication policy of business both internally and externally is

of the continuous improvement process (CIP)on the way to uniqueness .

12.03.2012

SME 20

Success Factor in Information Technology

• IT for data processing– Calculation

– Accounting

– Controlling

• Internet– Procurement (information, goods, services)

– Marketing and public relations

– Distribution / participation in tendering procedures

Success Factor of Cooperation

• Exchange of experience with other companies – also with competitors

• Customers

• Chambers, associations

• Product and process innovation

• Benchmarking = learn from the good: improve strengths, reduce weaknesses

• Indicators of own quality

• Gathering of information,further training, consulting

• Strategic cooperation • Cooperation in the value chain

• Universities and research institutions

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SME 21

• The best explorers and ambassadors of a company are its employees.

• Their knowledge and abilities, their motivation and flexibility decide on the marketability and future viability of the enterprise.

Find treasures …

Express appreciation

Success Factor of Employees

Importance of Corporate Culture, Organisational Development and Personnel for

International Activity

Workshop / group work�What is to be observed in international

activities in the structure and process organisation?

�How does and can the personnel be prepared for international requirements?

• 60 minutes for group work

12.03.2012

SME 22

Success Criteria for Strategic Cooperation in Foreign Trade

Workshop / Group work�How can I establish contacts abroad?

�What are the successful ways to develop- relationships from contacts- co-operations from relationships?

• 60 minutes for group work

Why we need information

• to have up-to-date knowledge

• to be able to take decisions

• to be able to become better

12.03.2012

SME 23

Information

• enables reducing uncertainty

• leads to greater knowledge

• is transferable (data, signals, ... language)

• brings about change in the receiving system

• can be shared without loss

Information Management

• … is the activity management at the strategic, administrative and operational level, which deals with the procurement, distribution and exchange of information and communication.

� Planning, management, operation and monitoring of internal and external information resources:

� Capturing the information needs� Planning of the information offer� Provision of the required information� Organisation of information provision

12.03.2012

SME 24

How Do We Gather Information?

• reading professional journals, books, ...• attending lectures, seminars, ...• watching fairs• speaking exchange of experience

� targeted: information planning forprocurement, distribution, use

� systematically: Internet research, responsibility

This way we obtain information!

Working Task for Further Preparation

Please create an information planning for your concept of foreign trade activities.

• What do you want to do (short description of the idea)?

• Which information do you need for this purpose?

• Where and how do you obtain information?

• Describe your approach.

12.03.2012

SME 25

Key Questions to the Concept of Export

• The enterprise concept / business plan:Economic efficiency evaluation

• Project management using the PDCA Cycle

• Success factors and termination criteria

My business is unique!- Guidelines for international unique selling points

Uniqueness of businessesis a constant challenge:• In terms of customers

– to be different than any competitor– and similar to the best ones.

Each enterprise is a place where the future is always created anew.

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SME 26

My business is unique!- Guidelines for international unique selling points

• Being different makes us strategy-capable and enables effectiveness = doing the right things

• Being similar to the best represents a permanent requirement for efficiency = doing the right things right .

• Necessary: continuous renewal

• Helpful: corporate solidarity

Mutability = desire for the future = innovation

Sustainability

... is adaptability, and thus a targeted balance

of expected changes and the desired future

and

Successful are those who are adapting actively!

the prevailing or future change potential.

12.03.2012

SME 27

Success Factors for Sustainability

• Market analysis• Competition analysis• Marketing• Information technology• Cooperation• Information and communication• Employees

• Work and process organisation• Logistics• Further education• ...

Work Task

Please discuss in by your own or – if you like – in small groups:

My treasure-box: … ����What distinguishes my company?

Time: approx. 10 min.

12.03.2012

SME 28

Business Plan - Definition

• written entrepreneurial idea (vision) on the basis of business data

• includes assumptions about future events and developments on the market and about the development of the company

• should be created at the foundation of the enterprise

• but it also helps with building a new business field, e.g. the export of goods or services, or participation in another (e.g. European) enterprise or the establishment of a branch

Business Plan - Tasks

• Ongoing review of own information

• Control mechanism

• Presentation of all potential opportunities and threats

• Design of an action strategy

ensures regular performance monitoring

12.03.2012

SME 29

Business Plan - Objectives

A business plan is drawn up in order to

• recognise the need of financial resources and thus provide support in the acquisition and argumentation (customers, financial institution),

• decide in a sound way whether the project should be continued or cancelled,

• optimise the entire business concept,

• increase the probability of success,

• stay on course.

Example of Bar Chart

responsible May 12 Jun 12 ... Nov 12

...Information

Country information B.K.

Trade regulations D.L.

Market analysis B.A.

...

Ready enterprise concept B.A.

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SME 30

Business Plan Outline

1. Summary

2. Company presentation/background

3. Description of the export idea; setting the objective

4. Market analysis

5. Market strategy

6. Implementation concept

7. Financial planning

8. Threats, problems and assumptions

9. Conclusion: benefits of the export service innovation for the operation

Formulating Objectives with SMART

Specific

Measurable

Attractive

Realistic

Time-bound

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SME 31

Formulating Objectives - Example

Starting today, we will reduce the complaint rate

(the sum of all complaints received) by the end

of 2012 by 5 %.

We will explain each customer in detail the

functionalities of their new facility. Each

technician will receive a checklist for this

purpose.

The person responsible for controlling this

measure shall be Mr. Müller.

Source: Thimm, Svenja: The future is service. Methods and materials for consultations, Düsseldorf 2004Source: Thimm, Svenja: The future is service. Methods and materials for consultations, Düsseldorf 2004

Working Task

• Description of the strengths and the weaknesses (enterprise analysis).

• Description of the existing opportunitiesas well as the threats to foreign trade activities (environmental analysis).

12.03.2012

SME 32

Working Task

• Please create in a working group a list of termination criteria, i.e. possibly measurable aspects from which you can conclude whether the export project should be continued or aborted.

– Each group formulates the most important two ( 2) criteriaWriter: please write down clearly the discussion results

– Working in small groups– Time: 10 minutes– Presentation of the results - put on the wallpaper

– Each group decides the presenting person

International Business Support Services for SMEs

Gediminas RickevičiusEnterprise Lithuania

12.03.2012

SME 33

Sėkmės!Good luck