Strategic Planning and Market

Selection
Learning outcomes

• To understand the steps in international

planning
• Understand the factors that contribute
to a market’s attractiveness
• Be able to apply analysis tool to market
selection:
– Expansion method
– CAGE method
– Contractible method
Strategic/Corporate Planning

Setting direction for the company

in light of the organisations goals
and capabilities and changing
market opportunities
International Marketing Planning
Process Phase 1
Preliminary analysis/screening
Match company and country
characteristics

Phase 2
Adapt the marketing mix

Phase 3
Develop marketing plan

Phase 4
Implement and Control
International Marketing PlanningAnalysis/Screening:
Process Company Character
• Mission/Philosophy
Phase 1 • Objectives
Preliminary analysis/screening Country Characteristics
• Political/legal stability
Match company and country • Economic
• Cultural factors
• Competition

Phase 2
Adapt the marketing mix

Phase 3
Develop marketing plan

Phase 4
Implement and Control
 Company:
Company Mission
Objectives
 Market
orientated

Realistic
CHARACTERISTICS
Specific OF
GOOD
Distinctive
competencies MISSION
STATEMENTS
Motivating
Blooming Marvellous:
Mission Statement

“Arising out of our experiences, we intend

to design, make and market a range of
clothes for mothers-to-be that will make
them feel they can still be fashionably
dressed. We aim to serve a niche missed
out by Mothercare, Marks and Spencer,
etc, and so become a significant force in
eCommerce for the mothers-to-be market”.

Source: The business plan workbook, Sunday Times

iSky:
mission Statement
“iSKY provides a complete outsourced customer-
loyalty management solution to both electronic
businesses and traditional companies seeking to
enhance their customers’ online and offline
experience before, during and after a purchase.
Our customer loyalty management services use
interactive one-to-one communications,
enhanced by real-time, personalised data
collection and management, to find, win, keep
and enhance profitable customer relationships.
We offer our clients a customised, fully
integrated, Web-enabled solution for interacting
with their customers through a variety of media
including real-time, text chat, e-mail, voice over
Internet protocol, telephone and facsimile”.

Source: The business plan workbook, Sunday Times

 Join at vevox.app

Or
Search Vevox in the app store

ID: XXX-XXX-XXX
 Join: vevox.app POLID:
Which mission statement is better do
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you feel?
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ü 1. BLOOMING MARVELOUS N
0%
2. iSKY
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For each previous mission statement now
write down:
• What is their business (what is our product)?
• Who is the customer?
• What is of value to the customer?
• What will the business be?
• Who is the competition?
• How are they different?

Now which mission statement do you prefer?

 Menti.com
Code: 8954194
Setting objectives and goals

• An objective is what you want to

achieve
• Good objectives are SMART objectives
• Specific
• Measurable
• Attainable
• Result-oriented
• Time-limited
SMART Objectives

• Griffith College wants to double its North

American student population. It is
currently 5% of the student body.
• Write a SMART objective and explain
how you will achieve this objective.
Our goal at Griffith College is to
………………………………………………
………………………………………………
………………………………………………
………………………………………….......
We will achieve this by
………………………………………………
………………………………………………
………………………………………………
 Menti.com
Code: 8954194
Our goal at Griffith College is to increase
the North American student population
(US, Canadian and Mexican) on full-time
(degree or masters level) courses, from
100 to 200 of the student body.
We aim to achieve this by September 24,
20XX.
SMART Objectives

× To increase awareness of Griffith College

 To increase the number of US, Mexican and

Canadian students from 100 to 200 into Griffith
College’s MBA programme by January 20XX. We will
achieve this by:
• Establishing a student exchange programme with 5 US 5
Mexican and 2 Canadian colleges.
• By creating a specially tailored MBA brochure to be
distributed to 50 US, Mexican and Canadian undergraduate
colleges.
• Advertising the MBA programme in student newsletters of
target universities.
International Marketing PlanningAnalysis/Screening:
Process Company Character
• Mission/Philosophy
Phase 1 • Objectives
Preliminary analysis/screening Country Characteristics
• Political/legal stability
Match company and country • Economic
• Cultural factors
• Competition

Phase 2
Adapt the marketing mix

Phase 3
Develop marketing plan

Phase 4
Implement and Control
 Markets:
What Country Market?
Choosing the right market
• Even the most experienced of organisations
can get it wrong
• Case of EuroDisney
• Wal-mart, Ikea, Vodafone have all met with varying
degrees of international expansion success
• What are the factors that an organisation
should consider before entering a market?
• What makes a country/market attractive?
What makes a country attractive?

Market/
Country
Potential

. Country

. Risk
Padlet – what makes a country
attractive?
https://padlet.com/deborahkirkland/
jv1ql92r6k3x
Padlet – what makes a country high
risk?
https://padlet.com/deborahkirkland/
9l6ehw2uhwp5
What makes a country attractive?

Market/
Industry
Potential

. Country
Risk
Market/industry potential

.
.
Market Competitor
Demand Few/Fragmented

What is the intensity

of rivals? Entry
What is the nature of
barriers? Bargaining
demand: Growth,
power of
size, quality?
customers/suppliers?
(Porter’s five forces)
Market/industry potential

.
. Resources:
Government People,
Infrastructure,
Incentives Raw materials
A critical source of
skilled people? Raw
materials and
Taxes? Subsidies? components? Tech.
innovation? Learning?
Government Are their infrastructure
contracts? and support industry
resources?
What makes a country attractive?

Market/
Industry

. Country
. Risk
Country risk four categories

.
Political Risk .
(shareholders, Competitive
employees, Risk
Operational)

Market disruption,
riots/strikes Asset Corruption
destruction,
Cartels
employee
harassment/ Networks
kidnapping
Country risk four categories

.
.
Operational
Economic Risks
Risks

Government regulations
and bureaucracies add
Economic growth costly taxation or
and variability, constraints or
Inflation, infrastructure is
unreliable
exchange rates
Which market would you recommend
Tipperary Water enters using the
contractible method?
Market/Industry Potential
Size of the market
Quality of the market
Future potential of the market
Level and intensity of competition
Government incentives (taxes vs.
subsidies, infrastructure, government
contracts)
Resources – People
Resources – Raw materials
Technological innovation
Quality of supporting infrastructure

Score A

Country Risk
Political risk
Economic risk
Competitive risk
Operational risk
Score B
Subtract A – B =
Find Average of A X/45
Find Average of B X/20
 Three Approaches
To Market Selection
1. Expansive Method
2. CAGE Method
3. Contractible
Three market selection approaches

1. Expansive method:
• Starting point is the home market
• Market selection is based upon similarities
(political, social, economic, cultural…)
• And environmental proximity
• Often referred to as the “nearest neighbour
approach”
• Suitable for small businesses with limited
resources to research markets and limited
experience in foreign markets
• Similar to Uppsala theory
Which market would you recommend
Tipperary Water enters next using
the expansion method?
Three market selection approaches

2. CAGE method:
• Developed by Harvard Professor Pankja
Ghemawat (2001, 2007)
• Also scores a market based upon
similarities (Cultural, Administrative,
Geographical, Economic)
• But more sophisticated as it also takes
the industry into account allowing you
to adjust for impact of language,
religion, politics etc.
 CAGE framework for assessing
country difference (Ghemawat, 2007)
Cultural Administrative Geographical Economic
distance and political distance differences
distance
Distance -Different -Absence of Physical Different
between two languages, eth- shared political remoteness consumer
countries nicities, or monetary incomes, costs
increases with religions, social association and quality of
norms -weak legal and production
-Lack of social financial resources
networks institutions,
- Hostility
Industries most Industries with “strategic” Products with Products
affected by the cultural or industries high whose demand
distance highly linguistic transportation is sensitive to
content costs or consumer
dependent on income levels.
communication
Three market selection approaches: CAGE
https://globalization.stern.nyu.edu/cage
 1. The country closest to
Australia in both Geographic
and CAGE distance – is it the
same country?
CAGE 2. The geographic distance(rank
number) between the UK and
Exercise: Australia and the CAGE
distance (rank) between the
Find the 3.
UK and Australia
Write down the CAGE
following distance rank between UK
and Australia for:
https://glob 1. Trade (merchandise

alization.st 2.
exports)
Information (printed
ern.nyu.ed publications)

u/cage 3. People (tourist arrivals)

Three market selection approaches

3. Contractible method:
• Unlike the expansion method where
you start with the home market,
here you start with the total number
of potential markets
• Systematic screening of all markets
with knock-out factors being
identified
Which market would you recommend
Tipperary Water enters using the
contractible method?
Market/Industry Potential
Size of the market
Quality of the market
Future potential of the market
Level and intensity of competition
Government incentives (taxes vs.
subsidies, infrastructure, government
contracts)
Resources – People
Resources – Raw materials
Technological innovation
Quality of supporting infrastructure

Score A

Country Risk
Political risk
Economic risk
Competitive risk
Operational risk
Score B
Subtract A – B =
Find Average of A X/45
Find Average of B X/20
 General Investment Framework

45
High
High Risk/High Return High Attractiveness
(JV, Strategic Alliance) (FDI)
Market/
Industry
Potential
Low Attractiveness Low Risk Low Return
Low (Do Not Invest) (Export)

9
20 High Low 1
Risks
International Planning Process
Phase 1
Preliminary analysis/screening
Match company and country
Adaptation of:
Product
Brand name, Features
Packaging etc.
Phase 2 Price
Adapt the marketing mix Promotion
Message, Channels
Distribution
Logistics, Channels

Phase 3
Develop marketing plan

Phase 4
Implement and Control
Phase 2: Tipperary Water
Product Manager must be able to answer many questions
Phase 2: Example: Tipperary Water
Product Manager must be able to answer many questions

• How do German’s rank water relative

to other beverages?
• Do they have high or low consumption
levels?
• Which type of water is preferred?
Sparkling? Still? Flavoured?
• Where do Germans buy most bottled
water?
• What is the perception of bottled water
– necessity? luxury? Health related or
indulgence?
• When do they most consume bottled
water? Mealtimes only, throughout the
day?
• What is the preferable size?
• What price willing to pay?
• What methods of promotion are used?
International Planning Process
Phase 1
Preliminary analysis/screening
Match company and country

Phase 2
Adapt the marketing mix
Specific Marketing Plan:
Situation Analysis
Objectives and Goals
Strategy:
• Target Market
Phase 3 • Product
Develop marketing plan • Price
• Promotion
• Selecting Mode of
Entry
Phase 4 Budgets
Action Plan
Implement and Control
International Planning Process
Phase 1
Preliminary analysis/screening
Match company and country

Phase 2
Adapt the marketing mix

Phase 3
Develop marketing plan

Assign responsibilities
Phase 4
Measure performance
Implement and Control Correct for errors etc.