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Agenda
Internationalization and Software export Theories on export
Uppsala model Business Network theory
Product Software Export Planning Method Export success factors Steps Case study and validation Conclusions
Discussion and questions
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Internationalization
Definition Internationalization is the process of increasing
involvement of enterprises in international operations.
In history the export of physical goods has always been there. Country specific goods Power play and tensions Taxation and regulations
What about exporting software?
What about offering an online software service?
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Agenda
Internationalization and Software export Theories on export
Uppsala model Business Network theory
Product Software Export Planning Method Export success factors Steps Case study and validation Conclusions
Discussion and questions
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Theory: Uppsala model
The Uppsala model (Johanson and Vahlne, 1976) is a theory that explains how firms gradually intensify their activities in foreign markets
The key features: Firms first gain experience from the domestic market Then move to foreign markets; Where:
• firms start in culturally and/or geographically close countries • move gradually to culturally and geographically more distant
countries
What: • firms start by using traditional exports of product • move gradually to more intensive and demanding operation modes
(sales subsidiaries, local services, partners, etc.)
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Theory: Business Network Model (D’Cruz and Rugman (1992)
Selected Competitors
Flagship Firm
Key Suppliers
Key Customers
Non-Business Infrastructure
Network Partners Governments
Flow of Strategic Control Flow of Products and Services
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Business Network Theory
Selling in market of Platform leader RunBook add-on on SAP
Follow the customer USoft: UK office deal with Texaco UK US office to serve Texaco US, then sales starts
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Agenda
Internationalization and Software export Theories on export
Uppsala model Business Network theory
Product Software Export Planning Method Export success factors Steps Case study and validation Conclusions
Discussion and questions
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Research project: Method for software export planning
Development of a planning method that supports strategic planning of product software export initiatives.
Identification of the areas of concern in exporting product software to new (geographical) markets
Joint work of Mari Pulkkinen, Johan Versendaal, Ronald Batenburg and Sjaak Brinkkemper
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Research trigger
Exporting is an opportunity for product software companies Limited home market Easy distribution
Not much research, except for Adaptation for local markets (financials, legal); Localization Distributed product development Release planning
Product software export is special No physical goods distribution Highly dynamic markets To serve multiple customers Cultural and country differences Making localizations is relatively easy
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Research approach
Literature research on success and fail factors of (software) export
Method construction
Case study application: Novo Cetec
Expert validation
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Export success factors
Product and market Product quality, after sales service, product development
process Customer needs, competitors, partners
Export execution Export documentation quality, customer communication,
smooth distribution Management and finance
Management commitment, skills and resources Marketing and distribution strategy, funding and customer
payments
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Software specific export success factors
Success factors for software export: Localization/ product adaptation to customers’ needs Obtaining market information Export finance Communication with customers
Relevant information about: Competitors and their products Customers (value chain and processes) Product suitability
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General export literature findings
Recommended steps to perform during export planning: Internal review External review Product review Objectives, strategies and action plans Export arrangements Finance
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PSEPM – Method overview
Step
1. Industry Trends
3. Customers external partners’
4. Customers’ operation
5. Product suitability
2. Competitors
Phase I: Country Analysis Techniques
Phase II: SDOT Analysis Techniques
Industry trend analysis, using: • Secondary data (e.g. Internet) • Survey (e.g. questionnaire) • Porter’s five forces model (Porter, 1985)
Similarities/ differences analysis and opportunities/ threats analysis, using: • Brainstorming • Weighting of importance • Porter’s five forces model
Value chain analysis, using: • Secondary data • Customer studies
(e.g. semi-structured interviews)
Process analysis, using: • Secondary data • Customer studies
Product analysis, using: • Offering analysis • Customer studies
Competitor analysis, using: • Secondary data • Survey
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1. Industry trends
Establish information on industry trends in foreign country based on Porter’s five forces model
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Case study - Description
Product software company Solution for the health/home care sector Small sized company Based in Holland Export to Finland (has historical ties)
Plan of action Interviews Desk research Internet
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Case study – Similarities and differences
Both countries: Increasing rivalry among existing firms Medium threat of new entrants Low bargaining power of suppliers Most competitors are small Four competitors have 95% market share
Main differences: Buyer bargaining power (NL higher than FI) Tougher competition in NL More product differentiation and specialization in NL
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Case study – Opportunities and threats
Differentiation strategy in FI Demonstrate market knowledge Show rich functionality for niche Identify best requirements
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Expert validation
Six experts: (former) managers of product software companies
Interview questions: Complete? Time efficient? Executable? Easy to communicate?
Results, increase: Internal analysis Cultural environment analysis Financial analysis Entry strategy determination
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Conclusions
PSEPM is of use for: Product managers Project managers Partner managers Company board
PSEPM can be improved: Include stakeholder dynamics (e.g. due to regulations) Include internal, cultural, financial and entry stratagy analysis More case studies
PSEPM is dependent on correct and complete information retrieval
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Agenda
Internationalization and Software export Theories on export
Uppsala model Business Network theory
Product Software Export Planning Method Export success factors Steps Case study and validation Conclusions
Discussion and questions