Issuu on Google+

Barcelona Activa MaxVal Tecnology Partners Internationalization Methodology Mikel Irizar/Michael Kessler

Activitat cofinanรงada per:


Barcelona Activa MaxVal Technology Partners • •

Mistakes Can be Costly

http://www.youtube.com/watch?v=7BLl_8ofD-8 In the 1960s the General Mills turned to Japan to market cakes from the Betty Crocker brands, but there was one problem, there were no ovens in the homes (Knight, 1995). General Mills then started to look for a way for the Japanese housewives to make the cakes using the rice cooker, which is in every Japanese household (Knight, 1995). They were successful in the cake trials, and the product was launched with the name Cakeron (Knight, 1995). The new product was not getting repeat sales for two reasons: rice is eaten in Japan with every meal, and rice is also considered sacred (Knight, 1995). Soon after its launch, General Mills withdrew Cakeron from Japan (Knight, 1995). Now let's discuss translation problems that have occurred many times. Braniff's slogan "Fly in Leather" translated to "Fly Naked" in Spanish (Helin, 1992). Eastern Airlines used the slogan "We Earn Our Wings Daily" and the "Spanish translation of the Eastern slogan evoked a final destination in heaven, following death" (Helin, 1992). The Coors slogan "Turn it Loose" translated to Spanish, "Suffer from Diarrhea" (Helin, 1992). "Budweiser's 'King of Beers' became 'Queen of Beers' in Spanish because the Spanish word for beer, 'cerveza,' has a feminine ending" (Helin, 1992). Frank Perdue was ridiculed when his "It Takes a Tough Man to Make a Tender Chicken" slogan was translated into Spanish to say "It Takes a Sexually Stimulated Man to Make a Chicken Affectionate" (Helin, 1992).

Page  2


International Sales & Strategic Business Expansion Barcelona Activa MaxVal Technology Partners • Michael Kessler With more than 20 years of international experience he has started three companies and lead internationalization projects for two more. He has spent the last 8 years at NTRglobal where he was responsible for international sales and more recently for the Business Developent function • Mikel Irizar 18 years experience in large and start-up technology companies. He has lead international assignments for companies like Symantec and SGI, started and sold MetricSoft and grown start ups like NTRglobal. He is a Board Director for PasswordBank, Softec, Cloud IT and others

Page  3


International Sales & Strategic Business Expansion Barcelona Activa MaxVal Technology Partners • Percentage of international companies with less than1000 employees

1985 – 4% 1990 – 5% 1995 – 10% 2000 – 20% 2005 – 35% 2010 – 55% •

Small and medium companies no longer blocked from global competition… WHY?

Page  4


Barcelona Activa MaxVal Technology Partners

Internationalization -- Definition

• What does it mean to you?

Page  5


Internationalization -- Definition Barcelona Activa MaxVal Technology Partners • “Internationalization is a step by step process whereby a company increasingly commits itself globally. It employs people from different nationalities, and learns how to use an increasingly wider range of foreign sourced or foreign located resources (technology, services, funds,

organisational methods,...)“

• This process has the purpose of designing and implementing some corporate strategies which will allow the said company – – – – Page  6

To exploit opportunities, and to avoid threats, To gain sustainable competitive advantages in its own domestic market of origin To penetrate and capture market share in an increasing number of world markets To generate scale and thus, increase value


Barcelona Activa MaxVal Technology Partners

Internationalization Methodology

1. Product/Offer localization – Implications and cost • Product/Service description for the local market • Laws and regulations

• Support and material localization • Implications for the organization, systems and processes 2. Country/Region/Market Potential 3. Entry prioritization by country/region/market 4. Sales strategy by country/region/market

5. Metrics and tracking Success Page  7


Barcelona Activa MaxVal Technology Partners

• Internationalization Internationalization1.0

Internationalization 2.0 Internationalization 3.0

Page  8

Internationalization Cycles


Barcelona Activa MaxVal Technology Partners

Internationalization 1.0

• Internationalization 1.0 • Start: 1492 (Colón Discovered America) • End:1800

• Players: Countries

Page  9


Barcelona Activa MaxVal Technology Partners

Internationalization 2.0

• Internationalization 2.0 (1800-2000) • First Half • Steam Engine • Rail Road • Falling of Transportation Costs

• Second Half • Telegraph • Telephone • PC • Fiber Optics • WWW Page  10 • Falling of Telecommunication Cost


Barcelona Activa MaxVal Technology Partners

Internationalization 2.0

• Internationalization 2.0 • Players: International Companies

Page  11


Barcelona Activa MaxVal Technology Partners

Internationalization 2.0

• So now… we have a new dynamic: Companies as strong as Countries! Thailand Microsoft

Page  12

47,679 (GDP) 44,300 (Revenues)


Barcelona Activa MaxVal Technology Partners

• Internationalization 3.0 • Start: 2000

• Player: International People

Page  13

Internationalization 3.0


Barcelona Activa MaxVal Technology Partners

• Internationalization • 1.0 – Countries • 2.0 – Companies

• 3.0 - People

Page  14

Internationalization


Barcelona Activa MaxVal Technology Partners

7 Forces That Have Accelerated Internationalization In the last 25 years

Page  15


Barcelona Activa MaxVal Technology Partners

Internationalization Enablers

• Enabler 1: Fall of the Berlin Wall

• 1989 • No more Communism • Democracy

• Free Market • Toward to Single, Global Market Page  16


Barcelona Activa MaxVal Technology Partners

• Enabler 2 – Netscape

• 1995 • PC • Internet • WWW Page  17

Internationalization Enablers


Barcelona Activa MaxVal Technology Partners

Internationalization Enablers

• Enabler 3 -- Workflow Software • Working together

Ajax XML

• Different Hardware • Different Location

SOAP HTML HTTP

• Web technology

TCP/IP

• Effect from Flattener #2 Netscape

Page  18


Barcelona Activa MaxVal Technology Partners

Internationalization Enablers

• Enabler 3

• Cause more 6 Flatteners • #4 Uploading • #5 Offshoring • #6 Outsourcing • #7 In-forming

Page  19


Barcelona Activa MaxVal Technology Partners

Internationalization Enablers

• Enabler 4 -- Uploading • Power of Community (Connected Individuals)

• Community-developed • Softwares - Open Source

• News & Commentary - Blogging • Content - Wikipedia

Page  20


Barcelona Activa MaxVal Technology Partners

Internationalization Enablers

• Enabler 4 -- Offshoring • Split • Manufacturing • Service • And perform elsewhere, where • Most efficient • Cost-effective

Page  21


Barcelona Activa MaxVal Technology Partners

Internationalization Enablers

• Enabler 5 -- Outsourcing • Split • Manufacturing • Service • And perform elsewhere, where • Most efficient • Cost-effective

Page  22


Barcelona Activa MaxVal Technology Partners

• Enabler 6 -- Informing • Information Finding • Search Engines

Page  23

Internationalization Enablers


Barcelona Activa MaxVal Technology Partners

Internationalization Enablers

Enabler 7 – The Global Steroids • Computing • Instant Messaging, P2P

• VoIP • Videoconference

• Computer Graphics Page  24

Wireless Data Transmission


Barcelona Activa MaxVal Technology Partners

• Why now?

Page  25

Internationalization -- Definition


Barcelona Activa MaxVal Technology Partners

Internationalization – Why Now?

 It is a good time to internationalize!

 Spanish economy sluggish  Companies in the US and Asia open to European technologies  Good time to diversify geographic risks  Huge opportunity!

Page  26


Barcelona Activa MaxVal Technology Partners

Considerations

• What does internationalization mean for my product/service and implications? – Localization: creating or adapting a product to a specific locale

• • • •

Language cultural context Conventions and regulations market requirements

Lotus 1-2-3 was released in Japan without the ability to create radar charts—a common way to represent data graphically in Japan.

Page  27


Barcelona Activa MaxVal Technology Partners 1. Target customer and segmentation strategy Prospect Profile by industry, revenue, company size 2. Competitive analysis and offer to the local market •Purchasing factors by segment •Optimum product/solution for the market 3. Pricing strategy and optimization 4. Messaging and localization review •Unique selling proposition •Differentiation 5. Support level requirements •Resources •Materials •Language…. Page  28

Localization


Barcelona Activa MaxVal Technology Partners

Quiz: Which languages give you 76% of On-Line Access Population?

 Question: name the 10 languages, in correct order: -

English French Italian German Spanish Japanese Chinese-Simplified Korean Russian Swedish Portuguese Chinese-Traditional

ANSWER 1. English 2. Chinese-Simplified 3. Japanese 4. Spanish 5. German 6. Portuguese 7. French 8. Korean 9. Italian 10. Russian

Source: ―On the Web, Some Countries Matter More than Others‖ by Common Sense Advisory Page  29


Barcelona Activa MaxVal Barcelona Activa MaxVal Technology Partners Technology Partners

Question: which 5 languages do you add to English to reach 88% of “spending” Internet users? 1. Chinese-Simplified 2. Japanese 3. Spanish 4. German 5. Portuguese

ANSWER 1. Japanese 2. German 3. Spanish (incl. USA) 4. French 5. Italian

Quiz: How do you reach 88% of the most economically active users?

6. French 7. Korean 8. Italian 9. Russian Source: ―On the Web, Some Countries Matter More than Others‖ by Common Sense Advisory Page  30


Barcelona Activa MaxVal Technology Partners

17 Issues for Businesses Expanding Internationally Planning for Expansion 1. Strategy • Clearly define and stress test your strategy • What are the implications of your expansion for your existing operations? 2. Global trends • Is your organization exposed to new and emerging markets? • Has the composition of your major competitors changed? • Is there foreign investment in your space clustered in places where you are not? 3. Market research • What information is available on market and industry conditions? • Is this information up-to-date and what is the future outlook? • Short list of new markets, tap into available networks Page  31


Barcelona Activa MaxVal Technology Partners

17 Issues for Businesses Expanding Internationally Choosing the Location 4. Political and social climate • Is the political system stable? How do you assess sovereign risk? • Does the country suffer under high levels of sovereign debt? 5. Local tax and regulatory environment • Is the tax regime business friendly and/or competitive? • Does the country have free trade agreements or double tax treaties? 6. Legal system • Is it a common law system? If not, do you understand the outcomes? • Do the laws and the legal and judicial system provide support for and protection of commercial activities?

Page  32


Barcelona Activa MaxVal 17 Issues for Businesses Expanding Internationally Technology Partners Choosing the Location 7. Innovation and incentives • Should you develop your products in emerging or fast growth markets? • Are grants and incentives available for innovative organisations? 8 Location and infrastructure • Is economic infrastructure secure and reliable? • How would you deal with power outages, telecommunication down-time or traffic congestion? 9. Cultural compatibility • Are there significant cultural differences that may impact the way you conduct your business? • Are there likely to be language barriers? 10. Local workforce • What is the availability, skill-set and cost structure of the local work force? Page 33


Barcelona Activa MaxVal 17 Issues for Businesses Expanding Internationally Technology Partners

Doing Business Overseas 10. Financing • What are the cash needs of your business? What is your projected revenue? • Do you need strong partners to finance your expansion? 11. Choosing the operating structure • Are you looking for slow organic growth? • Are you looking to establish an immediate local presence? 12. Implementing the operating structure • What are the legal and administrative, and and regulatory requirements for setting up the business 13. Foreign exchange management and currency risk/controls • Is the local currency stable or volatile? • Is currency hedging available at a reasonable cost? Page  34


Barcelona Activa MaxVal 17 17 Issues Issues for for Businesses Businesses Expanding Expanding Internationally Internationally Technology Partners Doing Business Overseas

14. Business and international taxation • How will profits be taxed in your target location? • What is the treatment of losses? 15. Supply chain, transfer pricing and intellectual property 16. Risk management • Have you identified areas of risk and how will you address them? • Are your foreign operations susceptible to fraud? 17. Exit or wind-down • Will you continue to maintain a presence in this location? • What are the legal and commercial issues associated with closing a business

Page  35


Barcelona Activa MaxVal Technology Partners

Country/Region/Market Potential

What is the target market potential by country/region

Page  36


Barcelona Activa MaxVal Technology Partners

SWOT analysis

What is SWOT: (https://en.wikipedia.org/wiki/SWOT_analysis) “… It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective.‖ Helpful To achieve objectives

Harmful To achieve objectives Weakness

INTERNAL ANALYSIS

STRENGTHS • • • • •

Product IP Team Approach USP

S

W

• • • • •

Lack of competitive strength Cash pressure Effects on core activities Commitment List any disadvantage

SWOT SWOT EXTERNAL ANALYSIS

OPPORTUNITIES

Page  37

• • • •

New markets Partnerships, and Business Development Niche target markets Big contracts, RFPs

THREATS O

T

• • • •

Competitor reaction Economical situation Patents, legislative threats Market demand


Barcelona Activa MaxVal Technology Partners

Prioritization by Country/Region/Market

What markets do I go to and why? How do I make this decision? • Revenue Potential – Market Analysis (potential, competition….) • Profit Potential – Pricing Analysis • Strategic Decision – Must be there for company valuation reasons

Page  38


Barcelona Activa MaxVal Technology Partners

SWOT analysis

Simple rules for successful SWOT analysis. • Be realistic about the strengths and weaknesses during the SWOT • Keep it simple • SWOT analysis is about today and tomorrow. Distinguish between where your organization is today, and where it could be in the future. • SWOT should always be specific. Avoid grey areas where possible. • Always apply SWOT in relation to your competition i.e. better than or worse than your competition. • SWOT is subjective.

Remember: SWOT doesn’t replace thorough planning and execution

Page  39


Barcelona Activa MaxVal Prioritization by Country/Region/Market – Exercise Technology Partners What markets do I go to and why? How do I make this decision? • Revenue Potential – Market Analysis (potential, competition….) • Profit Potential – Pricing Analysis • Strategic Decision – Must be there for company valuation reasons

Page  40


Technology Sales with International Scope Barcelona Activa MaxVal Technology Partners

The Eight Entry Models

Page  41


Barcelona Activa MaxVal Technology Partners

Control Visibility Risk Cost Page  42

Model Levers


Barcelona Activa MaxVal Technology Partners

The 8 entry models

The Eight Entry Models

Page  43


Barcelona Activa MaxVal Technology Partners Advantages and Disadvantages of Each Model

Page  44


Barcelona Activa MaxVal Advantages and Disadvantages of Each Model - Exercise Technology Partners

Page  45


Barcelona Activa MaxVal Technology Partners -

Success Cases

Case 1: NTRglobal – Spanish company – Expansion to the US and China starting with joint ventures and finishing with the establishment of company owned offices and in the process of

preagreed repurchasing equity program. In two years the 30% of sales came from US and 60% from other 55 countries

-

Caso 2: Makella – UK company – Entering the US through a merger with a US company enabling the US and European shareholders with revenues from both conitinents increasing by more than twice the valuation of the companies

-

Caso 3: SofcloudIT – Spanish company – Strategic alliance to enter the US market. In 2011 signs a strategic alliance for distribution with a US based company – in process, but more than 20% of the revenue coming from the US.

Page  46


Barcelona Activa MaxVal Technology Partners

1. Strategy 2. Objectives 3. Tactics

4. Metrics

Page  47

Metrics and Tracking Success


Barcelona Activa MaxVal Technology Partners

Internationalization Methodology

1. Product/Offer localization – Implications and cost • Product/Service description for the local market • Laws and regulations

• Support and material localization • Implications for the organization, systems and processes 2. Country/Region/Market Potential 3. Entry prioritization by country/region/market 4. Sales strategy by country/region/market

5. Metrics and tracking success Page  48


Barcelona Activa MaxVal Technology Partners

Expectations

• What you should expect – International expansions are tough on cash – Not everything that shines is gold – When going to Asia and Eastern Europe, expect very high DOS and even higher AR

– When going to the US, everybody will say they can take you, BEWARE – Things will start great but won’t stay that way

• You really need to know what you are doing!!! – Do your homework – Choose your partners carefully – Think through how you will get paid – Be aware of local regulations

Page  49


Barcelona Activa MaxVal Technology Partners

Contact us at www.maxvalpartners.com Optimax+ ™

• ecervantes@maxvalpartners.com Optimax Premium ™

• mirizar@maxvalpartners.com Optimax ™

Page  50


Barcelona Activa MaxVal Technology Partners


Programa Vendes i Internacionalització