DABF 12. 11 13 How to achieve success through partnerships DABF Seminar: Sales The American Way November 12, 2013
DI International Business Development (DIBD) Goal: Assist DI members in developing efficient market entry solutions on emerging markets Market entry solution components: Market studies Comparative location analyses Market entry strategy development Feasibility studies / business plans Own Man In market start up solution Establishment & Full Company Administration Partner search (Distributor / sub-supplier) Distributor Management Advisory DI s International Business Consultancy Unit Founded in 1996 50 employees in 6 countries 100% user financed 600+ projects Focus: Emerging Markets DI foreign offices in: China (Shanghai & Xuzhou) Russia (Moscow) Brazil (São Paulo) USA (New York ) India (Mumbai)
A success abroad starts with a dialogue home We believe that our integrated process is more valuable than the sum of each individual phase Home Abroad Analysis: We make an assessment of your market potential and delivers a solid foundation for decisionmaking Strategy: We deliver an integrated market entry solution shorting the distance between home and aboard. Implementation: We find solutions to the problems which arise Market Selection Market Analysis Entry Strategy Implementation / market entry
Content 1. Danish Companies and International Business 2. Structured Partner Selection 3. Partnerships in Practice
Characteristics of Danish Companies Danish companies are generally very opportunity-driven Decisions are made relatively fast There is however differences in assessing international business opportunities between smaller and larger Danish companies: SME s Is there an interesting opportunity? Can we afford to spend our (limited) resources? Will we risk investing (our savings)? What is the risk (perceived)? "Will we like the food?" Larger companies Does it fit with our strategy (then we'll commit resources)? Is the expected return on investment better than other opportunities? Can risk be mitigated to fit our risk profile? "If we go, we'll like the food!"
Control Low High Anders Kjøller Mode of Entry Sales Subsidiary Production setup Joint Venture Agent / Distributor Export Low Risk & Reward / Time High
Why Partnerships in the US Make Sense The product range of Danish companies is often specialized and therefore fits well with a distributor or agent Danish SME s seldomly have the resources to establish their own organization in the US (in the short run) The market is geographically very large and hence challenging to serve from a single location Competition is often fierce which means that opportunities can often be found in several niches Consequently, the strategy will often be a focused positioning, even if there is a potentially wide geographical focus, which necessitates the use of partners 7
"Our Distributors"..
20/80
How are you working with your foreign partners?
Why the Lack of Success Abroad? Typical explanations: Too many competitors The partner is not doing enough in the market The products are too expensive The technology does not fit the market The market demand is weak Etc. Maybe the collaboration with the partner is not working as well as it should? Are you able to motivate the partners?
A Successful Partnership Requires An open book" approach Developing a "partner culture" within your own organisation Frequent contact with your partners Empathy towards your partners you must understand their market Your partners must understand and appreciate the VALUE of having you as a partner You must sell the idea of joint business development and success
Structured Partner Selection
The Process Function Analysis Determination of function-based criteria Briefing Information need Profiles Partner Profile Preparation Wide Screening (Desk/Field Research) Fine Screening (Field Research) Detailed assessment Scoring/ Rating Tests Communication Alignment of expectations Final Assessment (Dialogue) Selection
The Partner Profile Partner Requirements General Strength Product Factors Marketing Skills Commitment Network Think in terms of both requirements and wishes You will never find a partner fulfilling ALL requirements and wishes
Dialogue and Final Partner Selection This part of the process must take place through close dialogue and personal visits At the final partner selection, remember the following should be taken into account: Ability to communicate (effectively) Personal chemistry Market understanding Commitment and dedication Expectation... last but not least do not to forget your gut feeling!
Partnerships in Practice
Partner Management Guide: Why?
Partner Management Guide
Legal issues
Partner Management Guide
Things to Remember when Entering US Partnerships Key recommendations from three case companies, who DI has assisted in the US* : In the US in particular, everything you do must start and end with the enduser of your product. Therefore, have a strong customer focus and define your customer segment(s) clearly before initiating a partner search Find ways to stay in touch with the customers and the market, even when working with distributors Modesty won t get you far in the US. The American approach is very proactive (seen from at Danish point of view very pushy!) and the mentality is that no product is greater than your own. Adapt to the US culture do not make the mistake of thinking that your product and business model can reform the US market. * Tom s Group (Anthon Berg), Morsø Jernstøberi & Danstoker.
Why Culture Matters Cultural differences between Denmark and the US are often underestimated. Your company must be aware of cultural differences when partnering up with US companies. Below are examples of why culture matters in negotiations: Denmark Participants Only the necessary negotiators Dialogue Friendly yet firm language Method Examining each subject on the agenda one by one Communication Introductions first: Presentation of the company and its history slowly building to the climax USA Participants Several negotiators, including a lawyer Dialogue Potential disputes are always considered Method Fast decision-making, precise goals, short negotiation Communication Straight to the point: The value proposition, the uniqueness of the product
DI guide Find it at: www.di.dk/dibd
Questions?
Anders Kjøller Manager, DIBD Copenhagen E-mail: adk@di.dk Phone: (+45) 33 77 37 72 & (+45) 26 20 45 60 Kinga Szabo General Manager, DIBD NYC E-mail: kisz@di.dk Phone: +1 212 297 5789 / +1 917 445 6674 www.di.dk/dibd
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