Identify potential countries for a market entry with a sales organisation

TABLE OF CONTENTS

1. INTRODUCTION
1.1. Objectives of the Master Thesis
1.2. Composition of the Master-Thesis

2. RESEARCH
2.1. Primary research
2.2. Qualitative research – INTERVIEWS
2.3. Decision of interview-type
2.4. Interview agreement
2.5. Interview Checklist
2.6. Analysis of the interviews
2.7. Qualitative assessment of the interviews
2.7.1. When was your last market entry abroad?
2.7.2. Why have you chosen this market?
2.7.3. Which information did you collect before you made the decision to enter this particular market?
2.7.4. For which decision is the information necessary?
2.7.5. Where do you get this information?
2.7.6. What are the five most important key factors of all points you have mentioned?
2.8. Significant points of the interviews

3. SECONDARY RESEARCH
3.1. Market analysis
3.2. Competitors
3.3. Quality requirements
3.4. Distribution channels
3.5. Foreign Government
3.6. Statistical data
3.6.1. Real GDP
3.6.2. Unemployment rate
3.6.3. Exchange rate risks

4. GUIDELINE FOR SMALL AND MEDIUM-SIZED ENTERPRISES
4.1. Market analysis
4.1.1. Market size
4.1.2. Market growth
4.1.3. Profitability
4.1.4. Quality requirements
4.2. Competition
4.3. Distribution channels
4.4. Foreign Government
4.5. Statistical data
4.5.1. Real GDP
4.5.2. Unemployment rate
4.5.3. Exchange rate risks
4.6. Business trip
4.7. FMEA
4.8. Business plan

5. CONCLUSION

6. Bibliography
6.1. Books and Articles
6.2. Internet

TABLE OF FIGURES

Fig.1: Porter’s five forces. Adapted from Michael E. Porter. “Industry Structure and Competitive Strategy. Keys to Profitability.” Financial Analysis Journal, July – August 1980, p. 33

Fig. 2: Connection between quality advantage and success. Adapted from Burmann. Translated from the German by. S. Petschnig Marketing. 2007, p. 28

Fig. 3: Competitor profile comparison: adapted from Dieter Hoppen. “Vertriebsmanagement. Steuerung des Firmenkundengeschäfts im Inland und im Export. Translated from the German by Sasha Petschnig. 1999. München: Oldenbourg Verlag. p. 165

Fig. 4: Step 1 of the FMEA, Source: adaptation through author

Fig. 5: Step 2 of the FMEA, Source: adaptation through author

1. INTRODUCTION

More and more companies are forced or intend to enter new markets to achieve growth and thereby sustainability. Schmitz (2006, p. 1) writes that a lot of companies in Switzerland gain the bigger parts of their profits through exports. Georg Fischer, Agie-Charmilles or Bucher Industries achieve only between four and seven per cent of their turnover in Switzerland. According to Schüffel (2004, p. 9) 50% of the jobs in Switzerland rely on export. The problem in daily business is that most of the time the decision of entering a new market is based rather on emotions than on facts. Pfeffer & Sutton (2006, p. 44) state that many managers decide on the basis of their own experience and not on the basis of facts. Even in the daily business of the author that problem very often occurs. In other words, the output of the project should be a general guideline for small and medium-sized enterprises on how to tackle this problem.

The project name is “Identify potential countries for a market entry with a sales organisation”. This general guideline should be a prevention of wasting resources, time and above all money. Entering a new market is very complicated and the guideline should be a support for companies. It is not in the scope of the project which market entry strategy a company should use. As already mentioned, it should be a general guideline, so it is also not in the scope of the project to address specific market or branch conditions.

1.1. Objectives of the Master Thesis

The objectives are clearly stated as follows:

- Identification of criteria to identify the possibilities of a market entry.
- A guideline for small and medium-sized enterprises to explain the above mentioned criteria.
- Including a tool for risk management
- Support for the decision making process and more objective data for a business plan.

The overall objective is to generate a guideline on which companies are able to identify new markets efficiently on the basis of relevant information and to prevent any waste of resources, time or money.

1.2. Composition of the Master-Thesis

Firstly, in chapter two – the research method is explained. It is essential to know how the interviews took place and what kind of questions was asked. At the end of chapter two the reader gets an overview about the daily business of big enterprises. One important output of the interviews is that the reader gets not only the information which is analysed by the companies but also the source of information. In chapter three the academical or the literature’s point of view respectively flows into the project. Two outputs of chapter three are among other things to get a deeper view of the interviewee’s statements as well as new important and useful tools out of the academic world. In chapter four the guideline is created and in chapter five a conclusion will complete the Master-Thesis.

2. RESEARCH

On the next page the approach for conducting the interviews is explained.

2.1. Primary research

According to the objectives it is obvious that the best way of gathering information is primary research on a phenomenological paradigm base. The main points are that the phenomenological paradigm states mainly that the observer is a part of what is observed, that there are different methods used (e.g. In-depth interviews and literature) and small samples investigated in depth. Furthermore it states that the reality is not fixed however it exists within a certain context (Saunders et al. 2007, p. 57).

On the one hand new data material is requested and on the other hand it is very important that best practice enterprises give their point of view. To recapitulate it is possible to gather new information as well as investigation and analysis of data in reference to a tangible problem. The first point is to define the potential companies. For the project it is defined that the companies have to fulfil the following requirements.

- Internationally operating company.
- Located in Vorarlberg and Liechtenstein.
- Contact person of the company (a kind of door opener) is known by the author.
- At least operating with sales organisations in three different countries.
- Establishment of these companies at least three years ago. This is to guarantee sustainability.
- Standardised process for defining potential countries.

More precisely the used methodology is out of the qualitative research methods, as it will be carried out in at least three interviews. According to Bretschneider qualitative research is rather aimed at human beings than on hard facts (2007, p. 26).

If the companies are defined, it is another critical factor of success to contact the right people. The managers which are responsible for such decisions are usually situated in the top management. Through the experience of the author it is necessary to get in contact with the interviewees through door openers. This is possible on the one hand through the network of the author and on the other hand through the circumstance that Vorarlberg is a very small and cooperative province.

2.2. Qualitative research – INTERVIEWS

First of all the checklist has to be developed. This is very important, as it has big influence on the results. For the interviews it is decided to use open questions. Open questions are distinguished as they leave the answer of the question to the interviewee. No choices of answers are given in the questionnaire so the interviewer is able to gather a lot of information. In other words it is possible to recognise motivations, mindset, objectives and the context of the defined topic (Stalzer, 2002, p. 43).

The advantages are a higher success rate and a supplementary observation is possible. Furthermore there is less danger of misunderstandings and the face to face contact creates trust. The disadvantages are higher organisational efforts and costs. In addition the threat of influencing the interviewee by the interviewer is another disadvantage (Bretschneider, 2007, p. 38).

The result of the interviews is descriptive, as the output is a description of how best practised companies have answered the questions.

2.3. Decision of interview-type

To gain the right data it is decided to use In-depth interviews. The interviews will be carried out face to face style on a semi-structured base. This has the advantage that it is possible to combine flexibility with comparability (Finn et al, 2001, p. 75).

Structured interviewing would not be the right way, as with this system the interviewer limits a set of response to each question. As a matter of fact there is generally little room for variation in responses. Another topic is that with structured interviews the interviewee should not get involved in long explanations, but choose one standard explanation. For the project and the output of the interview it is necessary to discuss otherwise it can lead to misunderstandings (Denzin, 2000, p. 649).

An invitation with a briefing of the goals and the deeper sense of the project will be handed out. Thereby the interviewee is much more confident and is able to prepare himself. After the invitation the interviewee is called by the interviewer to answer any open questions. The interviewer confirms the date of the interview once again and clarifies the confidentiality agreement. It is very important that no branch specific information will be published and every interviewee gets a copy of the output. Then the interviewee has the right to withdraw his information and the interviewer has to erase the provided information immediately.

Then the interview takes place and the interviewer records the interviews if the interviewee agrees with that. With this approach it is secured that the interviewer draws the full attention to the interviewee. Therewith he can grasp all the information and behaviour of the interviewee and is able to recapitulate all the interviews. The duration is limited to maximum one hour, as the target group is very busy.

2.4. Interview agreement

It is necessary to involve the interviewee at an early stage. If the agreement of the interviewee takes place the interviewer sends an interview agreement. In this agreement the interviewer explains the topic and the framework of the interview. It should lead to an environment of trust and furthermore it gives the interviewee security. Another point is the organisational part of the interview. The interviewee can choose the date, the location and time, but is also responsible that no interferences occur. This is a fundamental part as it interrupts the interview-flow. Please note below the Interview agreement which is used for the project:

Information about the topic:

The objectives for this interview should be a clear picture of how best practised companies operate in reference to market entries. That is the reason why I need your support as you are one of the enterprises which has been doing it successfully over the years. The objectives for the interviews are answers to the following questions:

- Which criteria are involved for the identification of new markets?
- Which information for a market entry is mandatory?
- What is the purpose of this information?
- Where is the information available?

Besides that the interviewee gets information out of the introduction (please note point 1). Then the interviewee will receive an interview agreement sheet.

Agreement (please tick a box of each question):

The topic and the objectives are clearly defined.

Yes No

It is allowed to withdraw from the interview or the project at any time. I understand and agree.

Yes No

It is agreed that no names – neither company nor persons or industry-details – will be mentioned.

Yes No

During the interview the interviewer will use a voice recorder. This is necessary on the one hand for academic research and on the other hand that the interviewer can concentrate on the interview and not on writing the answers. So the tape is a support for the interviewer to recapitulate the interview and secure the academic research. After the interview the tape will be demolished to secure anonymity and secrecy. I understand and agree.

Yes No

The interview will last one hour. During this hour the interview should not suffer any interference. Date, day and location are subjects of the interviewee. So the interviewee is able to arrange the meeting environment and will be responsible that no interferences occur. I understand and agree.

Yes No

I am happy to participate and I am clear that my privacy and the company details are anonymised. Also no industry details will be mentioned in order to prevent any damage. I understand and agree.

Yes No

The interview can take place when the signed interview agreement is sent by the interviewee.

2.5. Interview Checklist

One of the key-points is that the interview is always influenced by the personal characteristics of the interviewer, including race, class, ethnicity and gender (Denzin, 2000, p.633). In this part of the assignment the checklist of the interviews will be described.

It is not recommended to use as many questions as possible but to use the right questions. The interview checklist should contain a thread or a distinguishable logic respectively. As a matter of fact the checklist itself is one of the hardest tasks to do. On the top level there are the objectives of the project. Then there are a lot of questions collected which will be categorised. After that a thread is elaborated and the final questions will be defined (Kaufmann, 1996, pp. 68).

Certainly the checklist has to be tested first, as the interviewer has to prevent any cases of misunderstandings. Especially during interviews it can lead to confusion but above all to wrong information.

Please note the checklist for the project below. There is an explanation for each question as well:

1. When was your last market entry abroad?

This is a kind of come-up question to get the interviewee used to the interview. It is a very simple question and should lead to less nervousness. The interviewee can talk a lot as it is something which he has done already. For the interviewer it is an important question as through this answer he is able to find some inconsistencies later.

2. Why have you chosen this market?

This question is a bit more in detail and should give a clearer picture of the systematic behind the decision-making process. This is a question which is very easy to answer for the interviewee as for him the reasons are obvious.

3. Which information did you collect before you made the decision to enter this particular market?

Now the interviewer goes into detail and wants to explore the systematic behind the process. It is a key part of the interview and the interviewee has to consider which information has been collected.

4. For which decision is the particular information necessary?

The interviewer has to clarify every point of the mentioned data. It does not matter whether it seems logical. However the interviewer needs to know which question is relevant to the information mentioned. After the interview and during the analysis the interviewer decides whether the information is industry-specific or if it can be used within the general guideline.

5. Where do you get this information?

It is also an objective of the project to give the companies support in gathering of information. Sometimes companies know which information they want but do not know where to get the information.

6. What are the five most important key points of all factors you have mentioned?

This should give a rating as there is a lot of information collected, if there is a systematic process in place. So the interviewer knows which information is mandatory.

2.6. Analysis of the interviews

The six-staged pragmatic analysis method according to Mühlfeld is used for the project. Each interview has to be written down word by word. All relevant passages in reference to the questions which can give answers to those have to be marked. On the second stage the interview will be divided schematically into a classification according to the checklist. In the third step the logic within the different answers has to be compiled. On stage four the logic has to be written down according to all answers and the different passages will be described in more detail, more differentiated and more precisely. The last but one stage contains the preparation of the analysis through connecting the text with the Interviews. At the end of the six-staged pragmatic analysis method the report will be generated which will in turn describe the analysis in detail (Mayer, 2004, pp. 36).

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