Internationalization Strategy

The first step towards successful internationalization is the identification and selection of suitable target markets. Corresponding market analyses are essential in order to know their strengths, weaknesses as well as opportunities and risks.

Based on your product and service portfolio, we focus on the systematic analysis of the following factors:

1. Market size
2. Market potential
3. Industry and customer segmentation
4. Market attractiveness & competitiveness of your products and services
5. Competitive situation
6. The regulatory environment (political stability, currency risks, complexity of business operations, legal certainty and IP protection, etc.).
7. Availability of local resources

– HR (availability of qualified employees

– Infrastructure (logistics etc.)

– Possible partner and distributor networks, etc.

8. Business ranking (economic KPIs of the target market, difficulty of business activity)
9. Investment ranking of international investors in the target market
10. Cultural Fit

Due to the usually limited resources of a company, not all attractive target markets can be tackled at the same time, thefore we focus on the markets which promise the fastest market entry success.

For this purpose, we build up a balanced scorecard – a ranking where the focal points are weighted according to their importance for your company. Preferences from your corporate cultural values are also included.

As a rule, the business models applicable to your core markets cannot be transferred 1:1 to a new target market but require adaptation to the local conditions in the new target country, which is the subject of the third module:

Based on the results of the market analysis of the target country as well as the SWOT analysis (evaluation of strengths, weaknesses, threats and opportunities) regarding the marketing of your product and service offering, we create an adapted business model tailored to your company.

The FMC Group uses the “CANVAS Business Model” as its methodology. It is easy to understand and offers a holistic approach in the consideration of all relevant aspects of a business model as well as their interconnections.

We provide you with answers to the following 9 building blocks:

Value proposition

Defining the products and services and the added value they contain that are geared to the needs of customers in the target market and positively differentiate them from the offerings of competitors.

Customer segments

Determine key strategic customers, customer segments and industries, that hold out the prospect of the greatest realizable sales potential.

Customer relations

Description of customer relationships, how the company interacts with its customers in the target market and what relationships it builds with them to satisfy their expectations and needs.

Distribution channels

From this perspective, we provide recommendations for determining the communication and distribution channels for how the company sells its products or services to customers. Examples include online stores, retail stores, distribution partners or direct sales.

Revenue sources

This module describes how the company generates sales and earnings in the target market. Examples include selling products, selling service contracts, charging licenses/fees, selling consulting, etc.

Key Resources

This element describes which key resources are required and, if necessary, need to be built up so that the company can implement its business model in the target market and fulfill its value proposition to the customer. Examples include employees, capital, IT and technology partnerships.

Key activities

Description of all activities that the company must perform in order to implement its business model. Examples are production, marketing, sales or customer service.

Key partner

In this module, it is important to determine which partners the company needs to operate its business. These can include, for example, suppliers, sales partners or technology providers.

Cost structure

Here, all costs incurred to realize the business model are compiled and estimated, e.g. employee costs, production costs, marketing costs or operating costs.

Together with the revenue sources block, profitability  calculations can be derived.

The business model developed and aligned with the target market provides the framework for the market entry strategy and the measures to be derived in the following, which are aimed at achieving rapid market shares and overcoming existing market entry barriers.

We advise and support you with the following building blocks of your market entry strategy:

Based on our market analyses, we provide decision recommendations,

• whether the entire market or individual industries are to be served,
• whether the core business should focus on OEMs or end customers,
• which are the most potential key customers and industries and
• which quality segment (high quality or low cost products) is to be served.

Our decision recommendations result from the market analysis results and include:

• Customer identification and listing
• Regional customers and industry concentration
• Opportunity Screening, etc.

Definition of the product and service portfolio

We support the positioning of your products and services in the target market by examining and evaluating the criteria that describe the market attractiveness and competitive strength in the target customer segments. For the documentation we make use of the Boston-Consulting Matrix.

Determination of the distribution channels

Deciding on the right distribution channels follows the objective of maximizing customer attention to the company and its products and ensuring customer satisfaction in terms of advice, fast and reliable delivery.

In doing so, we use our market analyses to evaluate the distribution channels

• Direct Sales
• Sales partner
• Dealers / Distributors
• E-commerce
• Combinations of the above distribution channels

and suggest the most suitable distribution channel for you.

If you wish, we can support you in your search for suitable partners in the target market, depending on your preferred sales channel.

Design of the delivery logistics

Crucial, but unfortunately often neglected, is the early analysis of the infrastructure in the target market in terms of stocking and supply logistics with the objective of availability and fast customer delivery (“fast last mile”).

We support you with an infrastructure map showing locations of

• Airports, highways and rail lines,
• Logistics hubs
• Suitable logistics service providers and partner networks, but also
• Competitor

and can therefore also be an important decision-making aid for your own choice of company location.

Determining the price strategy and conditions policy

A successful price and conditions strategy takes into account both the competitive situation and the needs of the customer.
We support you with the necessary information, such as customary market

• Terms of payment
• Payment morale
• Invoicing (showing discounts, etc.)
• Price sensitivity

Market communication strategy

(Advertising campaigns, social media, trade fairs, etc.)

Marketing usually requires both content-related and monetary support from the company’s head office at the beginning, as usual marketing budgeting, e.g. in % of sales, would not be sufficient in the first years to achieve the very important early customer perception in the market. We support the creation of marketing plans that are in line with the goals.

Choosing the right legal form of a company

We support you in choosing the appropriate legal form of company that will enable you to enter the market in the target market safely, quickly and without barriers.

The success of your market entry depends crucially on qualified employees and well-functioning processes, especially in the start-up phase of your presence in the target market. With our long industry and market experience as well as our local networks, we offer our clients support on an ad hoc project basis for their specific local requirements.

Depending on the target country, we offer different services:

 

Employee Leasing

Hiring of local employees without own local company

Recruitment

Search and selection of qualified employees

Company formation

Choice of the appropriate legal form and official registration

Location search

Based on the results of the market analyses, we suggest suitable locations for your start-up and assist in the search/selection/purchase/lease of office buildings, warehouse space, etc.

Partner search

Auditing and selection of suitable distribution partners, logistics service providers, suppliers, marketing agencies, etc.

Financial services

Financial management, accounting, payroll, etc.

Legal Services

Assistance with contract law, labor law, commercial law, etc.

For a detailed and specific description of these on-site support activities, please refer to the comprehensive FMC Group Service Offerings.

A successful start in a new market demands a high level of adaptability to a foreign work and business relationship culture from the employees involved and from the organization. The ultimate goal of our “Organization and People Development” module is to create a locally effective and high-performing organization that can adapt to changes in the external environment while maintaining a positive work culture and sustainably maximizing employee engagement and productivity.

With our local expertise, we help you analyze the current organizational structure and culture, both locally and at the interface to the supporting headquarters organization, identify weaknesses and opportunities for improvement, plan changes, and implement corresponding measures.

Our range of services includes:

• Advice on modeling the local target organization as well as the interfaces to the central headquarters organization
• Identification of personnel development needs
• Creation of individual personnel development plans (training, mentoring, networking, coaching, etc.)
• Creation of efficient communication plans and channels
• Transfer of intercultural knowledge with reference to the target market