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Marketing Strategies of Small and Medium Enterprises on Foreign Markets. Katarzyna Dziewanowska, PhD Faculty of Management Warsaw University. Area : 312,679 km2 Population : 38.1 million Men: 48.3% Women : 51.7%. Poland in Figures. Small and Medium Enterprises - Definition. - PowerPoint PPT Presentation
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Marketing Strategies of Small and Medium Enterprises
on Foreign Markets
Katarzyna Dziewanowska, PhDFaculty of Management
Warsaw University
1
Area: 312,679 km2Population: 38.1 million
Men: 48.3%Women: 51.7%
Data 2004 2005 2006 2007 2008GDP (bn PLN) 925 983 1,060 1,175 1,266GDP change (previous year=100)
105.3 103.6 106.2 106.7 104.8
FDI inflow (mln €) 10,237 8,330 15,741 16,674 10,970Unemployment rate (%) 19.0 17.6 14.8 11.2 9.5Exports (mln €) 65,847 77,562 93,406 105,893 114,566Imports (mln €) 70,399 79,804 98,945 118,262 139,329Inflation rate (previous year=100)
103.5 102.1 101.0 102.5 104.5
Poland in Figures
Employment:
◦ Micro: up to 10 people, Small: up to 50, Medium: up to 250
Net income:
◦ Micro: up to € 2 m, Small: up to € 10 m, Medium: up to € 50m
Assets:
◦ Micro: up to € 2 m, Small: up to € 10 m, Medium: up to € 43m
4
Small and Medium Enterprises - Definition
The importance of SME in Poland: They constitute 99% of operators
(95% in other OECD countries) They provide 68,4% of GDP
They employ 64,3% working people
(60-70% in other OECD countries) They generate over 45% of export
(25-35% in other OECD countries)
5
Why SME?
Year Total 0-9 10-49 50-249 SME Share (%)
2004 3468,2 3302,4 131,5 28,9 99,84
2005 3581,6 3410,2 138,0 28,3 99,86
2006 3576,8 3402,2 141,5 28,3 99,87
2007 3615,6 3436,8 145,7 28,3 99,87
2008 3636,0 3455,6 147,4 28,4 99,87
Enterprises According to Number of People Employed in Poland (in thousands)
Resources
Strategy development
Organizational structure
Risk-taking
Flexibility
Sources of market information
7
Characteristics of SME
Hidden Champion
Cooperation
Anonymous Contractor
Born Global
8
Marketing Strategies of SME on Foreign Markets
1. Building a position on local market
2. Careful selection of foreign markets – a few
3. Careful selection of foreign business partner
4. Building a strong brand
5. Careful segmentation process and segment selection
6. Marketing mix adjusted to foreign markets’ needs
9
Hidden Champion Strategy
Ambitious!!! Takes advantage of SME’s
strengths Full control Gradual involvement
Costs, costs, costs!
Time-consuming
Risky…
10
Pros & Cons
70%
1. Horizontal integration of producers
2. Building a strong brand (common or regional) on local and foreign markets
3. Other decisions relating to foreign markets are made by a joint company
13
Cooperation Strategy
Position on markets based on common/ regional brand
Cheaper and less risky Members do not compete
against each other
Common company may take over the control
Less flexible Works only for
homogeneous products
14
Pros & Cons
15
Mazovia Fruit Fresh Fruit Poland Group
Internationalization Fast and parallel on many markets Pro-active motives for entering FM
Competition Innovative and high quality product Close relationships with clients Building a network with international partners Building a strong brand Market segmentation – focus on a niche Highly standardized marketing mix
Owner
16
Born Global Strategy
Ambitious!!! Takes advantage of SME’s
strengths Full control Becomes a part of
marketing network
Costs Profits in long term Risky Requires highly innovative
products
17
Pros & Cons
18
1. Careful selection of partners (local or foreign)
2. Market selection is of secondary importance
3. Focus on production efficiency and low costs
4. Almost all marketing activities are done by a partner
19
Anonymous Contractor Strategy
Easier and cheaper Product matches the
market needs Low risk in short term Beginning of more
adventurous activities
Passive – no experience gained
No relations with final customers
Long term risk Low profit per unit Weak negotiation position
20
Pros & Cons
Syntex
Romeo Zbąszyń
Thank you.