Developing an International Business Plan
Equipped with the knowledge and skills gained from previous projects in this course and from preceding courses in the MBA program, you are now ready to put your international strategy all together in a business plan. Review the types of international strategies and their components as you begin this work.
Develop an entry strategy for Gustavo of about 6–7 pages in length. The strategy you develop should incorporate the components described here and in Step 3.
As you begin to develop an entry strategy, first perform the following assessments:
• Analyze your site as both a market for your products and as a site for certain value-chain activities.
• Short-list and profile potential partner company candidates.
• Determine what company you will select for partnership or alliance. Evaluate the benefits this partnership would bring to your organization’s market position or profits.
• Detail the pros and cons of three market-entry modes. Which entry mode would you recommend and why? How does your chosen mode fit your organization’s goals and objectives? For help in answering these questions, review Modes of Entry.
Estimate the financial investment required for the selected entry strategy.
When you have begun your entry strategy and chosen a local alliance partner, continue to the next step, where you will determine your organization’s degree of fit with the selected country.
The next step in developing your entry strategy is to determine your organization’s degree of fit with the selected country. Answer the following questions in your entry strategy:
• How would you make the strategic alliance work? Regulations and laws governing different types of business entities vary considerably from one country to another. What kind of legal business entity do you recommend for your organization in the country of operation? What will be the impact of certain country laws on this type of business entity?
• What are the operational roles and activities of the partners? Design an organizational chart for operations in the country. Explain why you have chosen this organizational structure.
• What will be the likely impact of the country’s culture and geography on your organization, the value-chain activities that are being relocated to the country, and the growth in sales of your organization’s products in the country? Review Globalizing the Management Model for depth of understanding.
Now that you have developed an entry strategy and determined your organization’s degree of fit within the selected country, you will create a marketing plan.
In addition to relocating certain activities in the value chain to the selected country, Gustavo wants to evaluate the country for its suitability as a market for your organization’s products. Review Target Markets for help with this evaluation.
Develop a 6–7 page marketing strategy for the industry in which your organization belongs. Your marketing strategy should incorporate the components described here and in Steps 5–6 below.
The first step in developing your marketing strategy is to identify and assess the following components:
• your organization’s main competitors in the country
• the actual and potential size of the market
• market and segment growth
• market and segment profitability
• underlying costs and cost structure
• distribution systems channels
When you have addressed these components in your marketing strategy, continue to the next step, where you will assess the characteristics of your organization’s potential customers in the selected country.
As you continue developing your marketing strategy, the next step is to make recommendations to Gustavo on particular aspects of your organization’s marketing strategy that would be tailored to the country’s market for your organization. Specifically, address the following components:
• marketing mix in the country
• promotional practices
• branding strategies
When you have assessed the characteristics of your organization’s potential customers in the selected country, continue to the next step, where you will assess your organization’s use of web networks and social media for e-marketing.
In the final step of developing your marketing strategy, you will assess your organization’s use of web networks and social media for e-marketing, given the unique ways in which computers, smartphones, the Internet, and social media are used among the country’s consumers. As you undertake this assessment, read more about management, strategies, tools, and practices in e-marketing. To complete this step, address the following components:
• Prepare market share estimates for your product or service in the country and revenue forecasts for the near term (6–12 months) and longer term (2–4 years).
• Provide proper justification for your projections, such as prior industry performance in terms of unit sales, market size, and profit margins in the country.
As you may recall from your meeting with Gustavo, he wants your estimate of the timeframe needed to break even and implement your strategy. As you continue developing your business plan for entering the new country, assess any financial and accounting challenges by answering the following questions:
• Examine the financial statements of competitors in the country. Are there any differences in terms of language, currency, or the type of statements (income statement, balance sheet, financial statement format, extent of footnote disclosures, and the underlying GAAP [generally accepted accounting principles]) between your organization’s reports in the United States and the reports required by law in the country? Review National Adoption of International Accounting Standards: An Institutional Perspective.
• What are the challenges your organization may face in the country because of its accounting standards?
• What is the required investment for relocating your organization’s value-chain activities to the country for years 1, 2, and 3? What are the projected savings, if any, for the same time periods? Provide justification for your estimates.
• What are your estimates of revenue projections for your company in the country for years 1, 2, and 3?
After you have assessed the financial and accounting challenges associated with entering the new country, continue to the next step, where you will address strategy implementation and control measures.
The next step of developing your business plan is to address strategy implementation and control measures by discussing the following components:
• Specify the major factors to be tracked for strategy effectiveness using the four perspectives of the balanced scorecard: learning and growth perspective, business process perspective, customer perspective, and financial perspective.
• Specify how your organization will monitor and report issues with joint-venture partners, subsidiaries, suppliers, and distributors in the country.
When you have addressed strategy implementation and control measures, continue to the next step, where you will make recommendations about your organization’s governance and accountability standards.
As you continue developing your business plan, next make recommendations about your organization’s governance and accountability standards by answering the following questions:
• How do your organization’s governance and accountability and code of conduct or ethics address risks such as bribery and corruption? Search for Transparency International’s Corruption Perceptions Index online and make recommendations for changes to the code, if needed, for operations in the selected country.
• Do your organization’s corporate social responsibility (CSR) policies address local community interests, stakeholders’ concerns, and supplier relationships? Make recommendations for CSR changes to the program, if needed.
Your final report should follow these guidelines:
• 14–15 pages, excluding the title page, table of contents, and reference page
• in-text citations and references should abide by APA format
• 12-point Times New Roman font
• one-inch margins
• double spaced
Your final report should include the following components:
1. Title page
o states the client company, country, the client’s product or service, type of legal structure, and the selected alliance partner
o date and your name
2. Table of contents
o page numbers for each major section
3. Executive summary
o summarizes the results of your analysis and how you arrived at the recommendation
o belongs on a separate page from the introduction to the paper
o Start your executive summary as follows: “Business Plan for [selected client company] to enter [selected country] $(size of market in US Dollars) market for [product/service] through a [type of legal structure] with [selected alliance partner].”
4. Introduction (first page of paper body)
o states the purpose of the paper
o explains what the paper will do
o introduces the industry, country, and company’s name
5. Analyzing organization’s resources and capabilities
o choice of a local alliance partner and entry strategy
o organization’s degree of fit with the country
6. Understanding your organization’s industry
o market analysis
o characteristics of potential customers in the country
o use of web networks and social media for e-marketing
7. Analyzing country’s external environment
o finance and accounting
o strategy implementation
o governance and accountability
o one- or two-page summary of the recommendations and rationale
o APA-style reference page
o if needed