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NU Kellogg prof on country-market selection

Friday 25 February, 2011

Northwestern University Kellogg business school adjunct professor of marketing Phil Corse conducted this seminar Where in the World is Your Next Customer? Foreign Market Selection and Entry  hosted by the Industrial Council of NearWest Chicago.  I heard Phil speak before & wrote about it here10 Questions You Should Ask About Doing Business in China (pardon the quality of this post, but it was from when I 1st started blogging).  Phil was good enough to forward his presentation so here it is:  IL Feb 16 Pres

Here’s his running commentary:

Like many, while his failures have been many & successes rare, he continues to serve FMCG (fast moving consumer goods) & B2B clients seeking to go global.  In assessing whether or not your company is global-ready, rate your firm from 1-5 on these questions:

  1. What’s your global budget?
  2. Do you have a global strategy/plan?
  3. Are you wired for e-commerce, (which makes you global automatically)?
  4. How is your firm’s international management expertise?
  5. How are your global contacts?
  6. How many global customers do you already have?
  7. Is moderate risk acceptable to you? In assessing risk, Corse poses the questions, “Are you willing to quote prices in their currency?” & “Does it make sense to abdicate your markets to local representatives?”
  8. Are you comfortable getting out of your comfort zone?
  9. Are you willing to invest in global expansion?
  10. Will you accept foreign currencies?
  11. Are you culturally sensitive?
  12. How well-traveled are you?

His CAGE acronym stands for Culture, Administration, Government, & Economy.  Only big companies can handle expanding into 3-5 countries @ a time.  Examples of winners of global markets in his 3 spheres are Wrigley’s gum in distribution, Coke in branding, & the iPhone in innovative products.  Phil adds Indonesia & VietNam & drops Russia from the BRIC acronym to create BVIIC & differentiates China from India by noting that the former has better hard infrastructure & the latter has better soft infrastructure.

Q&A

  • PC recommends in-country localization/translation through a local agency.
  • Since it’s no longer a big deal to have offices in many locations, the trend is toward more regional headquarters organizations.
  • The A in his CAGE acronym refers to the forms you’re required to do business in any country.  The G refers to 1 of Porter’s 5 forces.
  • While in the past SME’s might have serendipitously stumbled into global business in the past, it’s tough for SME’s to pursue it now because of their scarcity of different resources.  Serving foreigners here is 1 way to dip your toes into these waters.
  • Transparency can work for & against you when pursuing world-wide markets.
  • Corse has never done a letter of credit in his entire international career.

To add some real world application, Phil tasked the group with an exercise:  identify & rate the top 3 selection criteria & markets for Dell’s new Android tablet computer.  I wasn’t able to stick around to get the results, but this always enables the newbies to confront, at least @ a superficial level, all of the complexities that go into these kinds of decisions.

A fellow Chicago Triathlon Club member attended as the local representative of this program Trade Adjustment Assistance.  Check it out to see if it can be of help competing against foreign imports.

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