Alexander Frevel, Hanse Parlament, “Tasks and tools for a systematic development of international activities“

1. 12.03.2012
Sveiki!
Step by Step to International Markets
Tasks 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)
Opening speech
Ms. Lina Vaitkeviciene
Deputy Managing Director,
Enterprise Lithuania
SME 1

2. 12.03.2012
BalticSupply
… supports SME networking in the Baltic Sea Area
that 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 enterprises
11:15 Coffee break
11:30 Tasks and Tools for a systematic development of international activities:
Alexander Frevel
13:00 Lunch break
14:00 Tasks and Tools … (continuation)
15:30 Coffee break
15:45 Information Management / Exchange of Experiences on successful
activities: Alexander Frevel, Elina Priedulena
International Business Support Services for SMEs: Gediminas
Rickevičius, Enterprise Lithuania
Eubizz.net – Baltic Supply Road Show “Get on board!” (Video)
SME 2

3. 12.03.2012
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
SME 3

4. 12.03.2012
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 Parliament
Hamburg/Germany
SME 4

5. 12.03.2012
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 Switzerland
Hotel Palafitte,
Neuchatel
SME 5

6. 12.03.2012
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 Environment
Our 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
SME 6

7. 12.03.2012
Complete Solutions for Individual Living
Spaces of Demanding Customers
Carpentry
14 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 and
furnishings 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
SME 7

8. 12.03.2012
Module: Export capability
Challenges
• Globalisation / Internationalisation
!
• Pace of technological change
• Socio-demographic transition
• Rules and standards Opportunity
Threat
• Changed customer expectations
SME 8

9. 12.03.2012
The House of Export Capability
Foundations of export
potential
Framework conditions
Commercial, tax law Partnership
Language, culture Corporate
Management governance
Values
Attitude Behaviour Motivation
Education
Knowledge, skills Competences
Expertise / abilities
Efficiency
Product Process
Productivity Innovation power © Alexander Frevel
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
– …
SME 9

10. 12.03.2012
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 experience
– 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
Attitude,
Behaviour
Export Increasing the Management
environment export capacity organisation
Professional
competence
© Alexander Frevel
SME 10

11. 12.03.2012
Stages on the Way to Foreign Involvement
Tasks and Tools
Market Market Market
Preparation expansion
selection entry
Analysis of own business model Building infrastructure Expansion
Country observation Target positioning Implementation strategy
Tasks
Market
processing
Implementation of core abroad
Market attractivity Market entry strategy processes
Internationalisation profile Project management
Instruments
Marketing
Environmental analysis SWOT Analysis
Process optimisation
(e.g. balanced scorecard)
Vision and objectives Service engineering
Development and
qualification of options
Business plan
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.
SME 11

12. 12.03.2012
Aspects in the Selection of the Target
Country
Spatial distance, Culture,
framework conditions mentality
Target
country
Opportunities & Local contacts,
threats of the market, knowledge of the
market potential, country,
information gathering language skills
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.
SME 12

13. 12.03.2012
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 Phase Strategy type Implementation form of Subject of performance Measure
provider international strategy
No international experience
Experience < 3 years
Experience > 3 years
Market selection
Market preparation
Market entrance
Market expansion
country - only delivery
Production within the
/assembly abroad
Domestic production - sales
Production abroad
Pure export
Domestic cooperation
Cooperation abroad
Own branch
Joint venture / franchise etc.
Manufacturing of parts
Product(s)
System performance
…
…
…
…
…
SME 13

14. 12.03.2012
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.
SME 14

15. 12.03.2012
Development of an Export Concept
• Market analysis and marketing
competition analysis, target group analysis (AIDA method)
• Information and communication
Information 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 are
also of interest for the foreign market and thus
exportable?
SME 15

16. 12.03.2012
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?
SME 16

17. 12.03.2012
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
Possible distribution channels and the sales situation
• 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?
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
SME 17

18. 12.03.2012
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.
SME 18

19. 12.03.2012
Information as a production factor
Processing information
Knowledge
Data
Success Factor of Information and
Communication
An active information and communication policy of
business both internally and externally is
• the prerequisite
• the subject (means and topic)
• and the result
of the continuous improvement process (CIP)
on the way to uniqueness.
SME 19

20. 12.03.2012
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 • Benchmarking = learn from the good:
companies improve strengths, reduce weaknesses
– also with competitors
• Strategic cooperation • Cooperation in the value chain
• Customers • Indicators of own quality
• Universities and research • Product and process innovation
institutions
• Chambers, associations • Gathering of information,
further training, consulting
SME 20

21. 12.03.2012
Success Factor of Employees
• The best explorers and ambassadors of a
company are its employees.
• Their knowledge and abilities,
their motivation and flexibility decide on Express
the marketability and future viability of appreciation
the enterprise.
Find treasures …
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
SME 21

22. 12.03.2012
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
SME 22

23. 12.03.2012
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
SME 23

24. 12.03.2012
How Do We Gather Information?
• reading professional journals, books, ...
• attending lectures, seminars, ...
• watching fairs
• speaking exchange of experience
This way we obtain information!
targeted: information planning for
procurement, distribution, use
systematically: Internet research,
responsibility
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.
SME 24

25. 12.03.2012
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
Each enterprise is a place where the future is
always created anew.
Uniqueness of businesses
is a constant challenge:
• In terms of customers
– to be different than any competitor
– and similar to the best ones.
SME 25

26. 12.03.2012
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
the prevailing or future change potential.
Successful are those
who are adapting actively!
SME 26

27. 12.03.2012
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.
SME 27

28. 12.03.2012
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
SME 28

29. 12.03.2012
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.
SME 29

30. 12.03.2012
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
SME 30

31. 12.03.2012
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 2004
Working Task
• Description of the strengths and the
weaknesses (enterprise analysis).
• Description of the existing opportunities
as well as the threats to foreign trade
activities (environmental analysis).
SME 31

32. 12.03.2012
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.
– 2
Each group formulates the most important two ( ) criteria
Writer: 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 Rickevičius
Enterprise Lithuania
SME 32

33. 12.03.2012
Sėkmės!
Good luck
SME 33