This analysis is done to help the company and so honesty is a must it is a good idea to use other people to help with the analysis and those with some knowledge of the business would be best.
Worksheets 1 and 2 should be completed. Gaps may be left in the beginning-any entry is a start, and entries can be added later. Each step involves time and thought and things that have been forgotten initially may be remembered later.
Non-marketing strengths and weaknesses:
In the earlier module a fairly good picture of the reasons for the company success and failures would have been built up. The focus was left fairly open but now some structure will be brought in to help spot areas that may have been overlooked.
While the emphasis is on marketing other factors (such as production skills and financial resources) which may be the most obvious strengths should not be forgotten this may result in overall advantages in serving the markets.
Marketing strengths and weaknesses:
This worksheet looks in detail at the marketing operations to see which are the best and worst. Again, something should be written opposite to each item listed in worksheet 2.
For example, opposite “knowledge of markets”, “know total market size”, and a weakness “don’t know breakdown by market segment” might be noted.
2. Assessing the competitors:
A good knowledge of the competition is required to spot opportunities. The following box provides a check list of possible ways of obtaining information about the competitors.
The main point to note in regard to the competitors is the maximum advantage should be taken of their weaknesses and efforts should be carried out to offset their strengths.
Worksheets 3 and 4 will help in getting to know the competition. Filling in these forms may simply mean writing down all that known about the competitors and, if there are blanks, information needed to fill them in have to be obtained. If the exporter is considering entering more than one market, the worksheets for each market should be completed separately.
The exporter needs worry if he cannot fill in each line. If there are gaps, the information required should be obtained.
3. Opportunities and Threats:
Scanning the surrounding world. The preparation of an export marketing plan cannot be done in a vacuum. It should involve identifying the outside factors that will have an impact on the business in the future, either by presenting opportunities or by posing threats.
Therefore, before laying down plans, some time should be spent for systematically examining the factors beyond control that will affect the business in the future so that advantage can be taken of them, or allowances made for them.
What factors should the scan of the outside world cover and how will these factors affect the business? How can anyone know (unless he has unusual powers) what is likely to happen?
The answer to the first question depends to some extent on the line of business and is discussed below, finding the response to the second question involves keeping abreast of events and of forecasts for the future, and analysing how these are likely to affect the company.
Every business needs to look out for the following trends in the target country:
i. Trends in the economy
ii. Population trends
iii. Technological changes
iv. Political, legislative or policy changes
v. General changes in society
Within each of these broad categories, there are many factors that will affect the business enterprise. But even a cursory examination of the changes likely to happen in, say the next three to five years, will reveal both opportunities and threats to the business. Apian should help prepare for these changes and keep the company may from being caught completely unawares.
Probably the exporter may not be in a position to have studies done on environmental issues. However, this does not mean that he should remain ignorant of the most important ongoing trends.
It is important to read a daily newspaper and a regular business magazine. In this way, it is possible to be informed about the most significant events as they occur. Then the possible implications of these events for the business should be studied. When these are read with the business in mind it pays off.
Worksheet 5 helps to find the world events that will affect the most. First, a quick look at the items in the worksheet should be taken. If an entry seems obvious: it can be put in, if not then there is no need to worry.
Then it is necessary to scan a quality daily paper for the last few days and circle anything that may be relevant to the SME. By using this approach over a few days, entries can be added on the worksheet.
The exporter should remember that even one good opportunity spotted may be all that is needed. Then plans can be made to take advantage of it.
Another way of spotting market opportunities Worksheet 5 is designed to help look at how the international market-place is changing and how it will affect the business. Now this can be looked at it in a slightly different way and to try to identify new opportunities.
The best ideas are often the simplest and yet good ideas are always elusive. To help spot opportunities, the simple technique shown below can be used.
Setting SME Objective:
Objectives are statements about what is to be achieved in the future. They are sometimes called goals or targets. Most business managers state that they are in the business probably “to make money” or because they want to be their own boss or something to similar effect. Such statements are, however, too vague to be useful in helping managers to decide in future courses of action.
For small business, it is sometimes difficult to divorce personal from business objectives. The first thing to do therefore is to sort out one from one another.
Let us start with the personal objectives. What is needed from the business? Some of the alternatives to be considered are:
i. A high annual income to live very well.
ii. A business that provides employment and keeps the family members at a reasonable standard of living (which should be defined in terms of an income figure).
iii. An initial low income with rapid growth prospects in three years, which will enable selling of the business to start another one.
iv. A fast-growing business leading to an annual expansion of production, workforce, capital base and profits in the foreseeable future, to the point where soon al big business can be run and social acceptance in the community can be gained.
These are distinctly different objectives. The objective which appeals most to a person depends on the weight he attaches to matters like:
i. The ability to manage a larger workforce and cope with the related problems.
ii. The ambition level.
iii. The readiness to work very long hours.
iv. The desire for free time to spend with the family.
v. The health and physical stamina.
So before the objectives for continued expansion or market dominance are set, it is advisable to stop and ask the above questions. There might be other reasons for working harder or working less and these should be examined before going further.
Many owners of small businesses are satisfied that their present company size ensures them an adequate standard of living and do not wish to expand because of the problems that expansion could bring.
In this situation their business objectives should be geared to maintaining their lifestyle. This may mean making sure that sales continue at least at the present levels for the foreseeable future.
However, this does not necessarily mean no new products, new markets or new competition. Planning remains essential in the ever-changing environments. Not wanting to grow does not mean not changing.
The ambitious may want to see their business develop and perhaps become a major force in their industry or expand into export markets. It depends upon the size of the mountain that a person wants to scale.
4. Marketing Objectives:
Marketing objectives also have to be set in the context of more general business objectives such as the financial return expected on the overall investment. For example, a 20% annual return on capital invested may be wished or a growth to a certain size in terms of employees may be wanted. The business objectives set other boundaries too.
In addition, before deciding on the specific marketing objectives, there should be a complete analysis of:
i. The enterprise’s strengths and weaknesses.
ii. The competitors’ strengths and weaknesses.
iii. Opportunities and threats in the market.
Now is the time to review the analysis of these items. What is seen there? Are some things obvious?
i. Some examples are: The market opportunity analysis may reveal a growing market segment that had not been noticed.
ii. The analysis of the competitors may show that they have also missed this market segment but that they have become very price competitive in other areas.
iii. The analysis of the strengths and weaknesses may disclose that the product quality is fine but that the sales literature does not highlight the product’s good points. The sales staff might be untrained and that accounts are lost because of late deliveries.
These findings would obviously point to what needs to be done in the long-term (develop new market segments) and in the short term (prepare new sales literature, train staff, and improve on delivery). Putting this in terms of objectives mean making statements like the following:
i. Next year, and for each succeeding year, this SME wants to achieve an overall growth in sales and profitability of 10%.
ii. During the next year, the SME will break into the following new markets (defined geographically, by customer or by market need).
iii. Next year the SME will increase its market share by 2%.
Other examples could be used but these give a basic idea of how to set objectives that provide an overall direction for the SME, a measure of the change required, and a time span over which this change will be effected.
Translating Objectives into Action:
This is the final step in the planning process. If all the previous tasks of assessing the company, the competitors and the market have been carried out, and broad objectives have been set. The exporter should be well-prepared to make decisions about what is needed to do to achieve them.
This involves looking at alternative strategies and deciding which one appears best. Example: It has been decided that the long-term (say, five-year) objective is to export to Japan and the Republic of Korea while expanding the current domestic market base. To achieve this, the objectives for the next year should be set as follows:
i. Expand total sales by 10%.
ii. Open up the market in Japan and sell 1% of the products there.
The alternative strategies that can be used to achieve the first objective are listed here.
i. Sell 10% more of the products to each of the present customers, that is, expand the market share in the existing market.
ii. Concentrate on the fastest-growing customers and expand sales to them.
iii. Open up some new accounts in the present market
iv. Add some new products to the line and sell them to existing customers.
Alternative strategies for achieving the second objective could be:
i. Conduct market research on the reproduces sale ability in Japan and carry out necessary product changes.
ii. Appoint a sales agent or distributor for Japan.
iii. Advertise in the Japanese newspapers and service customers from the home base.
The ability to think of alternative strategies depends on the knowledge of the marketing ideas that have been covered earlier.
5. Action Planning:
A useful framework for thinking about needs to be done to put each strategy into action is the “marketing mix” concept. This consists of four items on each of which a decision has to be taken.
i. Product (and its presentation)
iii. Distribution (place)
These are the four Ps which can be used to help with the action plans. Parallel to completing the export marketing plan, other plans have to be developed, especially a production and a finance plan. Then these have to be combined in a business plan.
There is no definite pattern for a business plan, various forms are possible. However, the model in worksheet 8 is suggested. The model is by no means exhaustive and other subjects can be added for coverage.