9 Route to Market Options

Transcription

1 Rute t Market Optins Yu have chices abut the rute t market yu take. Yur decisin abut the right rute fr yu will need t be based upn tw things: Yur research int hw any specific gegraphical market perates in practice. Where d yur ptential custmers expect t buy frm? Yur wn resurces. Sme ptins require higher levels f initial investment/n-ging management than thers. The fllwing mdule ffers a deeper insight int this tpic: Yur Rute t Market Yu can find it either in the SavvyAcademy r in the Access Markets area f Create Yur Plan. Infrmatin yu cmplete as part f the Mdule will be autmatically entered int yur Plan. The mre mdules yu cmplete, the mre yur Plan will build. Yur principal ptins as a prduct-based cmpany are: Agent Distributr Direct sale E-cmmerce Jint Venture Franchise Licence Value-added reseller Own ffice r subsidiary If yu are a service cmpany the abve are all still ptins fr yu with the exceptin f distributr (by definitin a distributr handles gds) In sme industries different terms apply fr slightly different functins. In the sftware business, fr example, the term reseller is used fr an rganisatin distributing n behalf f the Principal and integratrs have a similar functin t OEMs. Cpyright ExprtSavvy Ltd. All Rights Reserved. ExprtSavvy registered users may use this dcument fr persnal purpses nly. Distributin t third parties is expressly frbidden.

2 Agents An agent negtiates sales n yur behalf and earns a cmmissin. Yur prduct/service is delivered directly t the custmer. Sme agents may ffer spares r servicing facilities. Sme agents will hld stck n yur behalf. A market presence fr minimum cst May have cmplementary prducts The right agent will knw the market and will already be wrking with ptential target custmers s results can be fast Helps vercme language issues Yu are in direct cntact with yur custmers yu get direct experience f their needs and requirements May carry t many lines Will lse interest if sales dn t cme quickly Can lack cmmitment t yu and yur cmpany If the market has real ptential this may nt be the best rute As sales develp yu may prefer yur wn ffice Yu carry the stck and the csts and risks f invicing Relatinships can be difficult t get ut f in sme cuntries Get legal advice n yur cntractual cmmitments (especially EU and Arab states), agree clear targets and mnitr regularly. Plan a strategy that ensures yu are first ut f the bag. Distributrs A distributr buys prducts frm yu and sells them t their custmers. Distributrs may be sle, exclusive (even the Principal is debarred) r nn-exclusive. Understand the market, lcal custms and legal issues Will bear the currency risk If they speak gd English yu will mitigate language prblems If they have a gd reputatin in their wn right, their brand will supprt yur brand Prvide warehusing, lcal after-sales service and supprt Cpyright ExprtSavvy Ltd. All Rights Reserved. ExprtSavvy registered users may use this dcument fr persnal purpses nly. Distributin t third parties is expressly frbidden.

3 Yu deal with just ne custmer. They carry the credit risk f the end-users Will prbably want exclusivity. An agreement may lck yu in even if things g wrng. Yu are a step remved frm yur end-users and will be reliant n the market understanding f yur distributr May psitin yur prduct differently t yur ideal May want t cntrl the brand cmpletely Will require a significant margin Only ffer exclusivity after perfrmance is prven Agree clear targets and mnitr regularly Build trust and ask fr visits t end users Direct Sales Yu identify, sell t, supply t and service custmers frm yur UK base. Yu may use website, catalgue and/r telesales as part f yur prcess. If yu have UK custmers wh are part f a multinatinal yu may piggyback t custmers abrad. Yu exercise the level f cntrl yu are used t in the UK Yu are directly expsed t the market-place and shuld get a better understanding f it Yu develp relatinships with yur custmers Getting the right skills in place in yur business can be difficult, risky and expensive Yu carry all the cst and effrt f marketing Yu have t keep track f mre than ne market-place Travel is cstly in terms f mney and time There are persnal implicatins in time spent verseas Carefully assess the real csts f this ptin, including the cst f (eventually) appinting staff r representatives in cuntry Take accunt f the service limitatins and lgistical issues this ptin may impse Take accunt f additinal administratin and management csts Cpyright ExprtSavvy Ltd. All Rights Reserved. ExprtSavvy registered users may use this dcument fr persnal purpses nly. Distributin t third parties is expressly frbidden.

4 E-Cmmerce Yu service clients directly frm yur e-cmmerce website. Easy expsure t an internatinal audience Yu exercise a very high level f cntrl Yu are directly expsed t the marketplace A wider market fr yur niche ffering Yu need t understand and deal with VAT issues Yu carry all practive marketing csts Yu have t keep track f mre than ne marketplace Market penetratin will require lcal marketing : Think thrugh yur lnger-term bjectives. Are there territries yu want t fcus n and penetrate? Will yu eventually need an in-market partner? Jint Ventures Jint ventures can take many frms frm a frmally cnstituted JV cmpany (usually wned 50/50) t an infrmal strategic alliance. Brings market, knwledge and technical skills tgether in a pwerful way Clear up-frnt investment ensures cmmitment frm bth parties Clear jintly agreed bjectives are supprted by jintly agreed resurce allcatin Brand issues ften well-managed (smetimes thrugh a third brand) Custmer access is shared s access issues are managed A psitive statement t the market-place JVs ften have a limited life-span and this needs t be recgnised Needs up-frnt resurce investment Cultural issues can be difficult t manage Intellectual Prperty (IP) issues can be difficult t manage Partners may develp a different agenda Sharehlding structure can be an bstacle Cpyright ExprtSavvy Ltd. All Rights Reserved. ExprtSavvy registered users may use this dcument fr persnal purpses nly. Distributin t third parties is expressly frbidden.

5 Be very clear abut bjectives Be very clear abut IP wnership Recgnise prblems early and cmmunicate/negtiate Understand yur exit strategy Strategic Alliances Yu develp a relatinship with ne r mre businesses and wrk tgether t achieve strategic bjectives which wuld therwise nt be pssible. Access t lcal rganisatin Lcal credibility by assciatin Access t lcal custmer base Increased capacity Access t specialist skill-sets allw yu t fcus n cre cmpetencies Culd create a ptential cmpetitr IP can be an issue Rles and balance f pwer can be an issue : Ensure all parties perceive clear benefits frm the alliance. Wrk t keep cmmunicatin pen and clear Plan rles and respnsibilities carefully (including targets) Licensing/Franchising These terms cver a wide range f agreements relating t the sale r leasing f industrial r cmmercial expertise in exchange fr an agreed frm f remuneratin (usually an up-frnt payment and a ryalty based n sales). New prducts can be explited quickly. Minimises cmpetitive threat, especially where prduct prtectin is an issue. Fast expansin f the brand (franchising) Cpyright ExprtSavvy Ltd. All Rights Reserved. ExprtSavvy registered users may use this dcument fr persnal purpses nly. Distributin t third parties is expressly frbidden.

6 Allws yu t increase prductin withut strain n yur UK resurce Effective when significant prduct mdificatin is required Effective where UK prductin csts r transprt csts are high Access t high tariff markets Little capital investment Lw penalties fr failure Lcal partner uses cntacts t create market Cntrl f yur knw-hw is weakened Cmpetitin frm licensee when cntract expires Quality cntrl may be an issue Returns may appear lw cmpared t mre traditinal rutes Tip G fr a large up-frnt payment and a lwer n-ging ryalty t reduce risk Own ffice/subsidiary cmpany Yu set up a separate rganisatin verseas. This may be wned by yur UK cmpany r yu set up a differently wned cmpany. Cntrl Knw-hw kept in-huse Fcus Psitive market message and image (hme and abrad) Learn abut the market-place High initial csts Risk steep learning curve Writing ff initial lsses may be difficult Need t understand market legal and regulatry framewrk Risk f aggressive MBO (service businesses) Can expse UK business t liability and ther risk if UK cmpany is wner If the market is very attractive dn t dismiss this ut f hand. In the lnger term it may pay real dividends Understand the tax implicatins f trading under a different regime Cpyright ExprtSavvy Ltd. All Rights Reserved. ExprtSavvy registered users may use this dcument fr persnal purpses nly. Distributin t third parties is expressly frbidden.

7 Value Added Reseller A situatin where yur ffer may becme a part r cmpnent f smene else s yu may make up a cmpnent f smene else s larger ffer, this means that yur Partner will take yur ffering and add additinal features t it, perhaps installatin r after sales service. Als smetimes knwn as a Systems Integratr. Lw market entry csts Scalable mdel Reseller is mtivated t include yur prduct as it makes their ffer better Reseller is likely t have an existing custmer base If the resellers ffer is already established in the marketplace yu may gain credibility by assciatin Wherer value is added lcally imprt duties are ften lwer Yu need t be sure that the wider prduct meets yur quality criteria Mtivatin can be a challenge Ptential fr channel cnflict Tip Understand the real value f yur ffering and cnsider hw that value may be able t enhance yur Partners. Cpyright ExprtSavvy Ltd. All Rights Reserved. ExprtSavvy registered users may use this dcument fr persnal purpses nly. Distributin t third parties is expressly frbidden.