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SESSION 2

EXPORT STRATEGY

TO EXPORT OR TO NOT
EXPORT: THAT’S THE
QUESTION?

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Important Export Strategy Considerations …

1. local to international/global needs – Taiwan – ‘the country of

beauty facial masks’
2. independence to alliances – risk management, costs
3. quantum leaps in customer expectations – Telecom – 2G vs. 5G
4. protected to ‘open’ markets – trade barriers falling

Important Export Strategy Considerations …

5. structure of world trade – trade imbalances, reactions – short / long

6. economic interdependence – COVID-19
7. More regional trade agreements – 17 FTAs that Vietnam is participating in
8. “fads and fashions” in export trade – face masks?

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Important Export Strategy Considerations …

9. management myopia towards EM – “It’s too much hard work”
10. overseas business cultures – “foreign rules and customs”
11. national barriers to entry – e.g. Japanese rice imports
12. increased nationalism – “we don’t want you here”
13. evaluating risk – political, legal, economic, social, cultural
and technological – e.g. Venezuela
14. impacts upon local economies - international firms might ‘take over’

Important Export Strategy Considerations …

15. economic “counter cyclicality” – e.g. spreading risk…

16. overseas government policies – foreign government incentives...
17. different (country / firm) economics of:-
l manufacturing
l distribution
l logistics
l infrastructure
l regional position
l experience transfers

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Common Mistakes Export Firms Make

1. Lack of market assessment and detailed analysis ...
(“China is the biggest market, so we must be there” – Fosters Beer)

2. Plans not integrated to ‘fit’ the firm’s hierarchy / culture

(Citibank in Vietnam)

3. Planning Content vs. Process

(Mongolian Gov’t negotiations with Rio Tinto -
‘Oyu Tolgoi’ - “it can’t be all that hard !” – but it took 7yrs to set up)

4. Lack of understanding of how to create business “relationships”

(connections / “Guanxi” in China)

5. Proactive and adaptive strategies

(Toyota’s first manufacturing operation in USA)
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Strategy Formulation

How will you compete ?

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Strategy Insights …..

“Competitive strategy is about being different. It means deliberately

choosing to perform activities differently or to perform different
activities than rivals to deliver a unique mix of value”
Michael Porter

“The essence of strategy lies in creating tomorrow’s competitive

advantages faster than competitors mimic the ones you possess
today”
Gary Hamel and C.K. Prahalad

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Strategy Insights …..

“My job is to make sure that the firm has a strategy, and
that everybody follows it.”
Jack Welch

“Without a strategy the organisation is like a ship

without a rudder, going around in circles”
Robert Kaplan

“Competing in the market place is like war. You have

injuries and casualties, - and the best strategy wins”
Warren Buffett

2-12

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Jack Welch ...

Business is simple !

Don’t make it complicated …

3 simple rules for any business:-

1. How do you find profitable customers ?

2. How do you win them ?

3. How do you keep them ?

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What is Strategy ?

For Any industry

• What “position” to be profitable ?
• How to compete in that ‘position’?
• How to build it ?
• How to deliver it ?
• How to sustain it ?

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“Positioning”

a “picture” in the mind of the customer of who you are and

what you do

It can be positive or negative ….

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‘Positioning’
Singapore Airlines:-

“Service beyond your expectations …..

…… at a price within your means”

It therefore reflects both vision and strategy ……

How’s about Vietjet Air?

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“Positioning / Perceptual” Maps

If Vinpearl is about to enter into Singaporean market, where will it fit?

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What about different export

choices?

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There are 196 Nation States in the World …

(which ones might be attractive for you to do business in?)

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What can we
learn about
exporting from
different firms?

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The Strategy Evaluation Process

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What is Export Strategic Planning?

Why is it important ?
This process allows executive management to consider (and evaluate) the
best business options for the future profitable growth of the firm

Future ‘A’ ?

or …

Future ‘B’
Business Plan
(Marketing Strategy / Tactics) or …
Future ‘C’ ?

Now
Y1 Y2 Y3

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The 5 Tasks of Export Management

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The Difference between Actual and Planned Strategy

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Setting Objectives
4 key elements – for each year of the plan

1. Financial :-
Quantity of Profit - $ result …. Y1, Y2, Y3
Quality of Profit - RoA, RoE, ROFE etc … Y1, Y2, Y3

2. Marketing :-
Target Segments – key customer groups …. Y1, Y2, Y3
Products Needed – to meet customer needs, wants …. Y1, Y2, Y3
Profit Margins Needed – Y1, Y2, Y3

3. Operations :-
Cost to Income Ratio – as % (say 73.8%) …. Y1, Y2, Y3

4. HR :-
Who, Role, Skills, Experience, Rewards, Training …. Y1, Y2, Y3

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Your decision to export may be prompted by a

range of objectives:
> Establishing
> Expanding > Utilising
a broader and
sales and more stable excess capacity
profits. to lower costs.
customer base.

> Accessing
> Responding new technology
to competition. for overseas
markets.

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The Strategic Planning Model

Any firm’s Aim ? : Long Term Profitable Growth
How ? : Optimisation of Profit Equation (= long term profitable growth)
Key Issues ? : Identify and then and Win Profitable Customers (keep them!)

The Strategic Planning Process

(always) Begins with ……….. Vision

Mission

Objectives
Strategy Plan Marketing Plan

Business Plan

Implementation

Monitor / Review

Learn ! / Adapt !

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The Export Market Evaluation Model

External Possible Customers Marketing Process

Environment Target Customers Who to sell to ?
Political With what ?
Legal Who to Buy From ? Where ?
Economic When ?
Social How ?
Technical
Cultural The Market Place

Outcomes
Profitable Growth
Their Offers vs. Yours ? Quality Customers
Repeat Business
Competitors You

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Export Planning Concepts to Consider

1. Identification of the potential export markets?

(which countries are ‘best’? / FTA’s? / Opportunities?)

1. Estimates of market size (trends, forecasts), key competitors,

(how they compete) & pricing? (get the data / do the analysis)

3. Do you have product / service success in home market?

(if not, how will you fund / pay for export plans?)

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Export Planning Concepts to Consider

4. Will you need to modify P/S for an overseas market?

(car? food? clothes? software?)

5. Do you have the capacity to support new markets development

and marketing (people, P/S, mfg’ capacity, free cash & capital)?

6. Has the management team got the expertise, experience and

time available? (is your team good enough to succeed?)
4.

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Export Planning Concepts to Consider

7. Do you have the financial resources to support marketing,

distribution, servicing? (can you afford what ‘needs’ to be done?)

8. Is your Bank supporting you? (debt / equity ratios? what if …?)

9. Does your export team understand export financing and

different payment options? (this is VERY technical …)

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Export Planning Concepts to Consider

10. Are firm investors, employees committed to the export plans?

(do you have the support you need?)

11. Does the plan have defined goals / strategies?

(can you MEASURE success / failure?)
(if you can’t measure it … you can’t manage it)

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Key Learning and Revision Points

1. What are the important factors in considering

whether a firm is ready for export or not? Explain their
significance and relevance.

2. How can the lack of understanding on ‘how to build

relationships’ be a mistake in export management?

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NEXT WEEK’S DISCUSSION

Choose a VIETNAMESE firm that you know that is a
successful exporter.

Explain the basis / components of their export

strategy
(make sure that you can point out their objective,
positioning, competitive advantage(s),
opportunities/threats in exporting market(s) & how they
deal with them)

E.g. Trung Nguyên, VIFON, Duy Tân, Thiên Long, Kim

Sơn, Tân Huê Viên…

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